SA TELECOMMUNICATIONS INC /DE/, SC 13D, 1995-08-11

SA TELECOMMUNICATIONS INC /DE/
SC 13D, 1995-08-11
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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<PAGE> 1
Page 1 of ___ Pages

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. __)*

SA Telecommunications, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)

Common Stock
Series A Cumulative Convertible Preferred Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)

783942 10 5
--------------
(CUSIP Number)

Stephen P. Farrell, Esq.
Morgan, Lewis & Bockius
101 Park Avenue
New York, New York 10178
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

August 1, 1995
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.

Check the following box if a fee is being paid with the statement /x/. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)

Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.

* The remainder of this cover shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).

<PAGE> 2
SCHEDULE 13D Page 2 of ___ Pages

CUSIP NO. [783942 10 5]

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jesup & Lamont Capital Markets, Inc.

- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC,00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or (e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF None
SHARES ------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY (a) 1,833,336 shares of Common Stock (includes 500,000
EACH shares issuable upon exercise of Warrant and 1,333,336
REPORTING shares issuable upon conversion of 166,667 shares of Series
PERSON A Preferred Stock upon current conversion terms)
(b) 166,667 shares of Series A Cumulative Convertible
Preferred Stock
------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
(a) 1,833,336 shares of Common Stock (includes 500,000
shares issuable upon exercise of Warrant and 1,333,336
shares issuable upon conversion of 166,667 shares of Series
A Preferred Stock upon current conversion terms)
(b) 166,667 shares of Series A Cumulative Convertible
Preferred Stock
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
(a) 1,833,336 shares of Common Stock (includes 500,000 shares issuable upon
exercise of Warrant and 1,333,336 shares issuable upon conversion of 166,667
shares of Series A Preferred Stock upon current conversion terms)
(b) 166,667 shares of Series A Cumulative Convertible Preferred Stock
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /

- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
(a) 11.8%**
(b) 100%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!

** ASSUMES 11,591,730 SHARES OF COMMON STOCK OUTSTANDING ACCORDING TO THE
PROXY STATEMENT OF SA HOLDINGS, INC. FOR ITS 1995 ANNUAL MEETING AND
ASSUMES THE CONVERSION OF 1,250,000 SHARES OF SERIES B CUMULATIVE
CONVERTIBLE PREFERRED STOCK INTO COMMON STOCK AND ASSUMES THE EXERCISE OF
WARRANTS TO PURCHASE 1,050,000 SHARES OF COMMON STOCK.
<PAGE> 3

SCHEDULE 13D Page 3 of ___ Pages

CUSIP NO. [783942 10 5]

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Eagle Financial Group, Inc., d/b/a
Jesup & Lamont Group Holdings, Inc.

<PAGE> 4
SCHEDULE 13D Page 4 of ___ Pages

CUSIP NO. [783942 10 5]

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Howard Curd

<PAGE> 5
SCHEDULE 13D Page 5 of ___ Pages

STATEMENT PURSUANT TO RULE 13d-1

OF THE

GENERAL RULES AND REGULATIONS

UNDER THE

SECURITIES EXCHANGE ACT OR 1934, AS AMENDED

The responses in each of Items 3, 4, 5 and 6 are incorporated by reference
into each of the other such Items, and should be read together.

Item 1. Security and Issuer.

This Schedule 13D relates to (i) the SA Holdings, Inc. Common Stock
Purchase Warrant Certificate issued to Jesup & Lamont Capital Markets, Inc.,
dated July 31, 1995, (ii) Common Stock, $.0001 par value per share (the "Common
Stock"), of SA Telecommunications, Inc. (formerly known as SA Holdings, Inc.),
a Delaware corporation ("SA Holdings"), and (iii) Series A Cumulative
Convertible Preferred Stock, $.00001 par value per share (the "Series A
Preferred Stock"), of SA Holdings. The principal executive offices of SA
Holdings are located at 1912 Avenue K, Suite 100, Plano, Texas 75074-5959.

Item 2. Identity and Background.

(a) This statement on Schedule 13D is being filed by each of (i) Howard Curd,
an individual ("Curd") with a business address at 650 Fifth Avenue, New York,
New York 10019, (ii) Eagle Financial Group, Inc., d/b/a Jesup & Lamont Group
Holdings, Inc., a Delaware corporation wholly-owned by Curd ("J & L Holdings")
and (iii) Jesup & Lamont Capital Markets, Inc., a Delaware corporation and
wholly-owned subsidiary of J & L Holdings ("J & L Capital Markets," and
collectively with Curd and J & L Holdings, the "Reporting Persons").

Attached as Appendix A is information concerning the executive officers
and directors of each of the Reporting Persons required to be disclosed in
response to Item 2 and General Instruction C to Schedule 13D. Such executive
officers and directors may be deemed, but are not conceded to be, controlling
persons of the Reporting Person. No corporation or other person is or may be
deemed to be ultimately in control of any of the Reporting Persons.

(b) The address of the principal business and the principal office of each of
the Reporting Persons is 650 Fifth Avenue, New York, New York 10019.

(c) Mr. Curd's current pricipal employment is as President and Chief Executive
Officer of Jesup & Lamont Securities Corp., a wholly-owned subsidiary of J & L
Holdings. He is the sole shareholder of J & L Holdings.

J & L Holdings is a holding company whose three subsidiaries are
respectively engaged in providing investment banking advisory services, broker
dealer activities and making principal investments.

J & L Capital Markets is a wholly-owned subsidiary of J & L Holdings and
provides investment banking advisory services to its clients.

<PAGE> 6
SCHEDULE 13D Page 6 of ___ Pages

(d) During the last five years, except as set forth in Appendix A, none of the
Reporting Persons nor any of the persons or entities referred to in Appendix A
has been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors) or been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree, or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
Federal or State securities laws or finding any violation with respect to such
laws.

(e) The domicile of each of the Reporting Persons is set forth in the
Introduction to this Schedule 13D.

(f) All persons named in Appendix A are citizens of the United States.

Item 3. Source and Amount of Funds or Other Consideration.

J & L Capital Markets performed investment advisory services for SA
Holdings and, in lieu of the cash fee for such services, SA Holdings issued to
J & L Capital Markets: (i) the SA Holdings, Inc. Common Stock Purchase Warrant
Certificate (the "Warrant") to purchase 500,000 shares of Common Stock
(the "Warrant") and (ii) 55,556 shares of Series A Preferred Stock.
Additionally, J & L Capital Markets paid $1,000,000 in cash as consideration
for 111,111 shares of Series A Preferred Stock.

Item 4. Purpose of Transaction.

J & L Capital Markets acquired the Warrant and shares of Series A
Preferred Stock in exchange for investment advisory services rendered to SA
Holdings as described in Item 3.

The Share Purchase Agreement, dated as of July 31, 1995 (the "Share
Purchase Agreement") by and between SA Holdings and J & L Capital Markets,
pursuant to which 166,667 shares of Series A Preferred Stock were issued to J &
L Capital Markets, provides that, so long as at least 100,000 shares of Series
A Preferred Stock are outstanding or so long as J & L Capital Markets and its
affiliates beneficially own 5% or more of the voting power of the outstanding
capital stock of SA Holdings, SA Holdings will use its best efforts to cause to
be elected to its Board of Directors, from July 31, 1995 until the next
stockholders meeting at which directors are to be elected, one person, and
thereafter, a total of two persons nominated by J & L Capital Markets. J & L
Capital Markets intends to exercise such rights by nominating persons to the
Board of Directors.

Additionally, the Certificate of Designations, Preferences and Rights of
Series A Cumulative Convertible Preferred Stock, $.00001 par value per share,
of SA Holdings, Inc. (the "Certificate of Designations") provides that, upon
the occurrence of certain events of default with respect to the Series A
Preferred Stock, the holders thereof are entitled to elect a number of
directors to the Board of Directors of SA Holdings based upon the proportion of
Common Stock

<PAGE> 7
SCHEDULE 13D Page 7 of ___ Pages

into which the outstanding Series A Preferred Stock would be convertible to the
number of directors serving on the Board at such time.

The Reporting Persons may change any of their current intentions or
dispose of all or any part of the Common Stock or Series A Preferred Stock
beneficially owned by the Reporting Persons, or take any other action with
respect to SA Holdings or any of its equity securities in any manner permitted
by law. Except as disclosed in this Item 4, neither of the Reporting Persons
has any current plans or proposals that relate to or would result in any of the
events described in Items (a) through (j) of the instructions to Item 4 of
Schedule 13D.

The foregoing response to this Item 4 is qualified in its entirety by
reference to the Share Purchase Agreement, the full text of which is filed as
Exhibit A hereto and incorporated herein by reference, the Certificate of
Designations, included as Exhibit A to the Share Purchase Agreement and
incorporated herein by reference, the Warrant Purchase Agreement, dated as of
July 31, 1995 (the "Warrant Purchase Agreement"), between SA Holdings and J & L
Capital Markets, and the Warrant, the full text of each of which is filed as
Exhibit B and C, respectively, hereto and incorporated herein by reference.

Item 5. Interest in Securities of the Issuer.

(a) The aggregate number of shares of Common Stock beneficially owned by
each of the Reporting Persons is 1,833,336 shares, including 500,000 shares
issuable upon exercise of the Warrant and 1,333,336 shares issuable upon
conversion of the shares of Series A Preferred Stock based on the current
conversion terms, or approximately 11.8% of the class of such securities. The
aggregate number of shares of Series A Preferred Stock beneficially owned by
each of the Reporting Persons is 166,667, or 100% of the class of such
securities. Beneficial ownership of all such shares was acquired as described
in Item 3 and Item 4.

(b) The number of shares of Common Stock and Series A Preferred Stock as
to which there is sole power to vote or to direct the vote, shared power to
vote or to direct the vote, sole power to dispose or direct the disposition, or
shared power to dispose or direct the disposition for the Reporting Person is
set forth in the cover pages and such information is incorporated herein by
reference.

(c) There have been no reportable transactions with respect to the Common
Stock within the last 60 days by any of the Reporting Persons except for the
acquisition of beneficial ownership of the shares of Common Stock and Series A
Preferred Stock being reported on this Schedule 13D.

(d) None of the Reporting Persons has, and to the knowledge of each such
person, no other person has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from

<PAGE> 8
SCHEDULE 13D Page 8 of ___ Pages

the sale of the shares of Common Stock being reported on this Schedule 13D.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to the Securities of the Issuer.

The responses to Item 2, Item 3 and Item 4, the Share Purchase Agreement,
the Certificate of Designations, the Warrant Purchase Agreement and the Warrant
are incorporated herein by reference.

Item 7. Material Filed as Exhibits.

The following are filed herewith as Exhibits to this Schedule 13D:

A. Share Purchase Agreement, dated as of July 31, 1995 by and between SA
Holdings and J & L Capital Markets.

B. Warrant Purchase Agreement, dated as of July 31, 1995, between SA
Holdings and J & L Capital Markets.

C. SA Holdings, Inc. Common Stock Purchase Warrant Certificate to
Purchase 500,000 shares of Common Stock issued to J & L Capital
Markets, dated July 31, 1995.

D. Certificate of Designations, Preferences and Rights of Series A
Cumulative Convertible Preferred Stock, $.00001 par value per share,
of SA Holdings, Inc. (see Exhibit A to Share Purchase Agreement filed
as Exhibit A hereto).

E. Joint Filing Agreement, dated August 9, 1995, among J & L Holdings,
J & L Capital Markets and Howard Curd.

<PAGE> 9
SCHEDULE 13D Page 9 of ___ Pages

SIGNATURE

After reasonable inquiry and to the best of its knowledge and belief, each
of the undersigned certifies that the information set forth in this statement
is true, complete and correct and each of the undersigned agrees that this
statement may be filed jointly.

Dated: August 9, 1995

Jesup & Lamont Capital Markets, Inc.

By: Howard Curd
---------------------------------
Name: Howard Curd
Title: Executive Vice President

Eagle Financial Group, Inc., d/b/a
Jesup & Lamont Group Holdings, Inc.

By: Howard Curd
---------------------------------
Name: Howard Curd
Title: President and Co-Chief
Executive Officer

Howard Curd
----------------------------------------
Howard Curd

<PAGE> 10
SCHEDULE 13D Page 10 of ___ Pages

APPENDIX A

DIRECTORS AND EXECUTIVE
OFFICERS OF J & L CAPITAL MARKETS
AND J & L HOLDINGS

1. DIRECTORS AND EXECUTIVE OFFICERS OF J & L CAPITAL MARKETS. The
following table sets forth the name, age, business address and present
principal occupation or employment, and material occupations, positions,
offices or employments for the past five years of each director and executive
officer of J & L Capital Markets. Each such person is a citizen of the United
States of America, and, unless otherwise indicated below, the business address
of each such person is c/o Jesup & Lamont Capital Markets, Inc., 650 Fifth
Avenue, New York, New York 10019.

<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL
NAME POSITIONS HELD DURING THE PAST FIVE YEARS; BUSINESS ADDRESS
- ---- -----------------------------------------------------------
<S> <C>
Howard Curd (30)....................... Director of J & L Capital Markets since December 1994. Mr.
Curd has also served as the Executive Vice President of J & L
Capital Markets since December 1994. Since its inception
in 1991, Mr. Curd's principal employment has been as
President and Chief Executive Officer of Jesup & Lamont
Securities Corp. During 1990, Mr. Curd was a Vice President
of Jesup & Lamont Securities Group.

Reuben Richards (39)................... Director of J & L Capital Markets since December 1994. Mr.
Richards' principal occupation since December 1994 has been
as President of J & L Capital Markets. From April 1991
through November 1994, Mr. Richards was a co-founder,
principal and Managing Director of Hauser, Richards & Co.
From 1988 through March 1991, Mr. Richards was a Managing
Director of Prudential Bache Capital Funding.
</TABLE>

2. DIRECTORS AND EXECUTIVE OFFICERS OF J & L HOLDINGS. The following
table sets forth the name, age, business address and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years of each director and executive officer of
J & L Holdings. Each such person is a citizen of the United States of America,
and, unless otherwise indicated below, the business address of each such person
is c/o Jesup & Lamont Group Holdngs, Inc., 650 Fifth Avenue, New York, New York
10019.

<PAGE> 11
SCHEDULE 13D Page 11 of ___ Pages

<TABLE>

<S> <C>
Howard Curd (30)....................... Director, Co-Chief Executive Officer and President of J & L
Holdings since April 1991. See paragraph 1 above for
additional information.

Rueben Richards (39)................... Chairman of the Board, Director and Co-Chief Executive
Officer of J & L Holdings since December 1994. See paragraph
1 above for additional information.
</TABLE>

<PAGE> 12
SCHEDULE 13D Page 12 of ___ Pages

EXHIBIT INDEX

Exhibit Description

A. Share Purchase Agreement, dated as of July 31, 1995, by
and between SA Holdings and J & L Capital Markets.

B. Warrant Purchase Agreement, dated as of July 31, 1995,
between SA Holdings and J & L Capital Markets.

C. SA Holdings, Inc. Common Stock Purchase Warrant
Certificate to Purchase 500,000 shares of Common Stock
issued to J & L Capital Markets, dated July 31, 1995.

D. Certificate of Designations, Preferences and Rights of
Series A Cumulative Convertible Preferred Stock,
$.00001 par value per share, of SA Holdings, Inc. (see
Exhibit A to Share Purchase Agreement filed as Exhibit A
hereto).

E. Joint Filing Agreement, dated August 9, 1995, among J & L
Holdings, J & L Capital Markets and Howard Curd.

<PAGE> 1
Exhibit A

============================================================================

SHARE PURCHASE AGREEMENT

DATED AS OF JULY 31, 1995

REGARDING SHARES
OF

SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK,
PAR VALUE $0.00001 PER SHARE,

SA HOLDINGS, INC.

============================================================================

<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<S> <C>
SECTION 1. SALE AND PURCHASE OF PREFERRED STOCK . . . . . . . . . . . . . . . . . . 2

SECTION 2. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

SECTION 3. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . 7
4.1. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . 7
4.2. Authorization of Borrowing; No Conflict as to Law or Agreements . . 7
4.3. Legal Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4. Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5. Offering of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SECTION 5. REPRESENTATIONS AND COVENANTS OF THE PURCHASER . . . . . . . . . . . . . . 9
5.1. Representations . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

SECTION 6. RESTRICTIONS ON TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . 10

SECTION 7. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 11
7.1. Office for Payment, Exchange and Registration; Location of Office. . 11
7.2. Reservation of Shares . . . . . . . . . . . . . . . . . . . . . . . 11
7.3. Listing of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.4. Securities Exchange Act Registration . . . . . . . . . . . . . . . 11
7.5. Private Placement Status . . . . . . . . . . . . . . . . . . . . . 12
7.6. Delivery of Information . . . . . . . . . . . . . . . . . . . . . . 12
7.7. Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . 12

SECTION 8. REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

SECTION 9. CONDITIONS TO PURCHASER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . 18
9.1. Certificate of Designations . . . . . . . . . . . . . . . . . . . . 18
9.2. Accuracy of Representations and Warranties . . . . . . . . . . . . . 18
9.3. Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9.4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

SECTION 10. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

SECTION 11. BREACH OF REPRESENTATIONS, WARRANTIES AND COVENANTS . . . . . . . . . . 19
</TABLE>

ii
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 12. SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . 19

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

SECTION 13. HOME OFFICE PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . 20

SECTION 14. AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . 20

SECTION 15. EXCHANGE OF SHARES; CANCELLATION OF SURRENDERED
SHARES; REPLACEMENT . . . . . . . . . . . . . . . . . . . . . . . . 21

SECTION 16. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

SECTION 17. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>

iii
<PAGE> 4

SHARE PURCHASE AGREEMENT

SHARE PURCHASE AGREEMENT dated as of July 31, 1995 by and
between SA Holdings, Inc., a Delaware corporation (the "Company"), and the
Purchaser listed on the signature page of this Agreement (the "Purchaser").

W I T N E S S E T H:

WHEREAS, the Company desires to sell to the Purchaser and the
Purchaser desires to purchase from the Company shares of Series A Cumulative
Convertible Preferred Stock, $.00001 par value per share, of the Company, all
upon the terms and provisions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

SECTION 1. SALE AND PURCHASE OF PREFERRED STOCK

(a) The Company agrees to sell to the Purchaser and,
subject to the terms and conditions hereof and in reliance upon the
representations and warranties of the Company contained herein or made pursuant
hereto, the Purchaser agrees to purchase from the Company on the Closing Date
specified in Section 2 hereof, the number of shares of the Company's Series A
Cumulative Convertible Preferred Stock, $.00001 par value per share, set forth
opposite the Purchaser's name on Schedule 1 hereto. The shares of such Series
A Convertible Preferred Stock being acquired under this Agreement and by the
other Purchasers under the other Share Purchase Agreements (as hereinafter
defined) are collectively herein referred to as the "Shares", containing rights
and privileges as more fully set forth in the Certificate of Designations of
the Board of Directors of the Company in the form attached hereto as Exhibit A
(the "Certificate of Designations").

(b) The purchase price to be paid to the Company by the
Purchaser for the Shares to be purchased by the Purchaser pursuant to this
Agreement shall be the amount set forth opposite the Purchaser's name on
Schedule 1 hereto. No further payment shall be required from the Purchaser for
the Shares.

(c) The Shares are being sold to the purchasers listed on
Schedule 1 hereto (the "Purchasers") pursuant to this Agreement and other
substantially identical agreements dated as of the date hereof (all such
agreements collectively, as from time to time assigned, supplemented or amended
or as the terms thereof may be waived, the "Share Purchase Agreements"). All
Share Purchase Agreements shall be dated the date hereof and shall be

<PAGE> 5
identical except as to the identities of the respective Purchasers. The sale
of Shares to each Purchaser under each Share Purchase Agreement is to be a
separate sale, and no Purchaser shall have any liability under any Share
Purchase Agreement other than the Share Purchase Agreement to which it is a
party.

SECTION 2. THE CLOSING

(a) Subject to the terms and conditions hereof, the
closing of the purchase and sale of the Shares to be purchased by the Purchaser
(the "Closing") will take place at the offices of Arter & Hadden, Dallas,
Texas, on July 31, 1995 or such other time and date as shall be mutually agreed
to by the Company and the Selling Shareholders (defined below) for the closing
of the acquisition of the stock of U.S. Communications, Inc.; provided that the
Closing shall occur no later than August 3, 1995. Such time and date are
herein referred to as the "Closing Date".

(b) Subject to the terms and conditions hereof, on the
Closing Date (i) the Company will deliver to the Purchaser a certificate
registered in the Purchaser's name (or its nominee, if any, as specified on
Schedule 1 hereto) evidencing the number of Shares set forth opposite the
Purchaser's name on Schedule 1 and (ii) upon the Purchaser's receipt thereof,
the Purchaser will deliver to the Company a certified or official bank check
(or wire transfer) in an amount equal to the purchase price (as specified in
Section 1(b) hereof) for the Shares to be purchased by the Purchaser payable to
the order of the Company in federal or other immediately available funds.

SECTION 3. DEFINITIONS

For purposes of this Agreement, the following definitions
shall apply (such definitions to be equally applicable to both the singular and
plural forms of the terms defined):

"Acquisition Agreement" means the Stock Purchase Agreement
dated as of June 30, 1995, as amended, between the Company, U.S.
Communications, Inc. and the Selling Shareholders.

"Affiliate" means (a) any director, officer or employee of the
Company, (b) any Person who, individually or with his or her immediate family
or any other Affiliate, directly or indirectly, beneficially owns or holds 5%
or more of the voting interest in the Company, or (c) any corporation,
partnership or other Person in which any Person described above owns a 5% or
greater equity interest. Without limiting the generality of the foregoing,
Jack W. Matz, Jr. shall at all times be deemed to be an Affiliate of the
Company.

<PAGE> 6
"Agreement" means this Share Purchase Agreement (together with
exhibits and schedules) as from time to time assigned, supplemented or amended
or as the terms hereof may be waived.

"Board" or "Board of Directors" means with respect to any
Person which is a corporation, a business trust or other entity, the board of
directors or other group, however, designated, which is charged with legal
responsibility for the management of such Person, or any committee of such
board of directors or group, however designated, which is authorized to
exercise the power of such board or group in respect of the matter in question.

"Business Day" means any day other than a Saturday, Sunday or
a day on which banking institutions in the State of Texas are authorized or
obligated by law or executive order to close.

"Certificate of Designations" has the meaning set forth in
Section 1(a) hereof.

"Closing" has the meaning set forth in Section 2(a) hereof.

"Closing Date" has the meaning set forth in Section 2(a)
hereof.

"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations and interpretations thereunder.

"Commission" means the Securities and Exchange Commission and
any other similar or successor agency of the federal government administering
the Securities Act or the Securities Exchange Act.

"Common Stock" of the Company or of a Subsidiary (as the case
may be) shall mean the Company's or a Subsidiary's (as the case may be) present
authorized Common Stock and any stock into which such Common Stock may
hereafter be changed or for which such Common Stock may be exchanged after
giving effect to the terms of such change or exchange (by way of
reorganization, recapitalization, merger, consolidation or otherwise) and shall
also include any common stock of the Company or of a Subsidiary (as the case
may be) hereafter authorized and any capital stock of the Company or of a
Subsidiary (as the case may be) of any other class hereafter authorized which
is not preferred as to dividends or assets over any other class of capital
stock of the Company or of a Subsidiary (as the case may be) or which has
ordinary voting power for the election of directors of the Company or of a
Subsidiary (as the case may be).

"Company" means SA Holdings, Inc., a Delaware corporation, its
successors and assigns.

"Conversion Share" or "Conversion Shares" means the shares of
the Company's Common Stock, $.0001 par value per share, obtained or obtainable
upon conversion of

<PAGE> 7
Shares and shall also include any capital stock or other securities into which
Conversion Shares are changed and any capital stock or other securities
resulting from or comprising a reclassification, combination or subdivision of,
or a stock dividend on, any Conversion Shares. In the event that any
Conversion Shares are sold either in a public offering pursuant to a
registration statement under Section 6 of the Securities Act or pursuant to a
Rule 144 Transaction, then the transferees of such Conversion Shares shall not
be entitled to any benefits under this Agreement with respect to such
Conversion Shares and such Conversion Shares shall no longer be considered to
be "Conversion Shares" for purposes of Section 8 hereof, for purposes of the
definition of Majority Shareholders or for purposes of any consent or waiver
provision of this Agreement.

"Convertible Preferred Stock" means the Company's Series A
Cumulative Convertible Preferred Stock, $.00001 par value per share, which will
be duly authorized on the Closing Date and which will have the rights, powers
and privileges on the Closing Date as more fully set forth in the Certificate
of Designations.

The phrase "current conversion price" has the meaning
specified in Section 7(h) of the Certificate of Designations.

"Majority Shareholders" means the holder or holders, at the
time, of at least fifty-one percent (51%) of the Conversion Shares, including
the Conversion Shares then outstanding and the Conversion Shares then
obtainable under outstanding Shares.

"Outstanding" or "outstanding" means

(a) when used with reference to the Shares or the Conversion
Shares as of a particular time, all Shares or Conversion
Shares theretofore duly issued except:

(i) Shares and Conversion Shares theretofore reported as lost,
stolen, mutilated or destroyed or surrendered for transfer,
exchange or replacement, in respect of which new or
replacement Shares or Conversion Shares have been issued by
the Company,

(ii) Shares and Conversion Shares theretofore cancelled by the
Company,

(iii) Shares and Conversion Shares registered in the name of,
as well as Shares and Conversion Shares owned beneficially by,
the Company, any Subsidiary or any of their Affiliates and

(b) when used with reference to the number of shares of Common
Stock of the Company as at a particular time, the then issued
and outstanding shares of Common Stock of the Company (not
including treasury shares or any other shares registered in
the name of the Company, any Subsidiary or any of their

<PAGE> 8
Affiliates), together with shares of Common Stock of the
Company issuable pursuant to any then outstanding warrants,
options, convertible securities or other rights to acquire
Shares of Common Stock of the Company.

For purposes of the preceding sentence, in no event shall "Affiliates" include
(x) the persons which are identified as "Purchasers" on Schedule 1 hereto or
(y) any Affiliates of any such persons.

"Person" or "person" means an individual, corporation,
partnership, firm, association, joint venture, trust, unincorporated
organization, government, governmental body, agency, political subdivision or
other entity.

"Preferred Stock" means any class of the capital stock of a
corporation (whether or not convertible into any other class of such capital
stock) which has any right, whether absolute or contingent, to receive
dividends or other distributions of the assets of such corporation (including,
without limitation, amounts payable in the event of the voluntary or
involuntary liquidation, dissolution or winding-up of such corporation), which
right is superior to the rights of another class of the capital stock of such
corporation. "Preferred Stock" includes without limitation the Convertible
Preferred Stock.

"Purchaser" means the person who accepts and agrees to the
terms hereof as indicated by such person's signature (as "the undersigned
Purchaser") on the execution page of this Agreement, together with successors
and assigns.

"Purchasers" has the meaning set forth in Section 1(c) hereof,
together with their respective successors and assigns.

"Rule 144" means (i) Rule 144 under the Securities Act as such
Rule is in effect from time to time and (ii) any successor rule, regulation or
law, as in effect from time to time.

"Rule 144A" means (i) Rule 144A under the Securities Act
as, such Rule is in effect from time to time and (ii) any successor rule,
regulation or law, as in effect from time to time.

"Rule 144 Transaction" means a transfer of Shares or
Conversion Shares (A) complying with Rule 144 as such Rule is in effect on the
date of such transfer (but not including a sale other than pursuant to
"brokers' transactions" as defined in clauses (1) and (2) of paragraph (g) of
such Rule as in effect on the date hereof) and (B) occurring at a time when
Shares (in the case of a transfer of Shares) or Conversion Shares (in the case
of a transfer of Conversion Shares) are registered pursuant to Section 12 of
the Securities Exchange Act.

"Securities Act" means the Securities Act of 1933, as amended,
and the rules, regulations and interpretations thereunder.

<PAGE> 9

"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules, regulations and interpretations thereunder.

"Selling Shareholders" means Bill J. Johnson, Howard Maddera,
Marianne Reed and NTS Communications, Inc.

"Senior Credit Agreement" means the Term Credit Agreement
between the Company and Norwest Bank Minnesota, National Association, dated as
of the date hereof.

"Share Purchase Agreements" has the meaning set forth in
Section 1(c) hereof.

"Shares" has the meaning set forth in Section 1(a) hereof. In
the event that any Shares are sold either in a public offering pursuant to a
registration statement under Section 6 of the Securities Act or pursuant to a
Rule 144 Transaction, then the transferees of such Shares shall not be entitled
to any benefits under this Agreement with respect to such Shares and such
Shares shall no longer be considered to be "Shares" for purposes of Section 8
hereof or any consent or waiver provision of this Agreement.

"Subsidiary", with respect to any Person, means any
corporation, association or other entity of which more than 80% of the total
voting power of shares of stock or other equity interests (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is, at the time as of which any determination is
being made, owned or controlled, directly or indirectly, by such Person or one
or more of its Subsidiaries, or both. The term "Subsidiary" or "Subsidiaries"
when used herein without reference to any particular Person, means a Subsidiary
or Subsidiaries of the Company.

"Transaction Documents" has the meaning provided in Section
4.1 hereof.

(b) For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

4.1. Corporate Existence and Power. The Company is a
business corporation duly incorporated, validly existing and in good standing
under the laws of Delaware, and is duly licensed or qualified to transact
business in Texas and Delaware. The Company has all requisite power and
authority, corporate or otherwise, to conduct its business, to own its
properties and to execute and deliver, and to perform all of its obligations
under, the Agreement or any documents required thereunder (hereinafter, the
"Transaction Documents").

4.2. Authorization of Borrowing; No Conflict as to Law or
Agreements. The execution, delivery and performance by the Company of the
Transaction Documents

<PAGE> 10
have been duly authorized by all necessary corporate action of the Company and
do not and will not (i) require any consent or approval of the shareholders of
the Company, or any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule or regulation or of any
order, writ, injunction or decree presently in effect having applicability to
the Company or of its Certificate of Incorporation or Bylaws or (iii) result in
a material breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
Company is a party or by which it or its properties may be bound or affected.

4.3. Legal Agreements. The Transaction Documents
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to the rights of creditors generally.

4.4. Stock.

The authorized capital stock of the Company consists of (i)
50,000,000 shares of Common Stock, $.0001 par value per share, and (ii)
12,500,000 shares of Convertible Preferred Stock, $.00001 par value per share,
of which, after giving effect to the Certificate of Designations, 250,000
shares have been designated as Series A Convertible Preferred Stock and 250,000
shares have been designated as Series B Convertible Preferred Stock. The
shares of the Company's Common Stock issuable upon conversion of the
Convertible Preferred Stock will, when issued, be duly authorized, validly
issued, fully paid and non-assessable.

The Certificate of Designations has been duly adopted by the
Company and is fully effective as an amendment to the Company's certificate of
incorporation. The Shares have all of the rights, priorities and terms set
forth in the Certificate of Designations.

4.5. Offering of Shares. Neither the Company, any
Subsidiary nor any agent nor other person acting on its behalf, directly or
indirectly, (i) offered any of the Shares or any similar security of the
Company (A) by any form of general solicitation or general advertising (within
the meaning of Regulation D under the Securities Act) or (B) for sale to or
solicited offers to buy any thereof from, or otherwise approached or negotiated
with respect thereto with, any person other than the Purchasers or not more
than 35 other institutional investors each of which the Company reasonably
believed was an "accredited investor" within the meaning of Regulation D under
the Securities Act or (ii) has done or caused to be done (or has omitted to do
or to cause to be done) any act which act (or which omission) would result in
bringing the issuance or sale of the Shares within the provisions of Section 5
of the Securities Act or the filing, notification or reporting provisions of
any state securities laws.

<PAGE> 11
4.6. SEC Reports. The Company has filed all proxy
statements, reports and other documents required to be filed by it under the
Securities Exchange Act. The Company has furnished the Purchasers copies of
its Annual Report on Form 10-K for the fiscal year ended December 31, 1994
Forms 8-K filed in the calendar year 1995 through the date hereof and Quarterly
Reports on Form 10-Q for the fiscal quarter ended March 31, 1995 (collectively,
the "SEC Reports"). Each SEC Report was in substantial compliance with the
requirements of its respective form and none of the SEC Reports, nor the
financial statements (and the notes thereto) included in the SEC Reports, as of
their respective dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.

SECTION 5. REPRESENTATIONS AND COVENANTS OF THE PURCHASER

5.1. Representations. The Purchaser hereby makes the
representations and warranties to the Company contained in this Section 5.

(a) The Purchaser has all requisite power, authority and
legal right to execute, deliver, enter into, consummate and perform this
Agreement. The execution, delivery and performance of this Agreement by the
Purchaser have been duly authorized by all required corporate or partnership
actions. The Purchaser has duly executed and delivered this Agreement, and
this Agreement constitutes the legal, valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to the rights of creditors generally.

(b) The Purchaser hereby represents to the Company that
it is capable of evaluating the risk of its investment in the Shares being
purchased by it and is able to bear the economic risk of such investment, that
(except as the Purchaser has otherwise advised the Company and the Purchaser's
special counsel in writing) it in purchasing the Shares to be purchased by it
for its own account, and that the Shares are being purchased by it for
investment and not with a present view to any distribution thereof in violation
of applicable securities laws. It is understood that the disposition of the
Purchaser's property shall at all times be within the Purchaser's control. If
the Purchaser should in the future decide to dispose of any of its Shares, it
is understood that it may do so only in compliance with the Securities Act,
applicable state securities laws and this Agreement. The Purchaser represents
that it is an "accredited investor" as defined in Rule 501(a) under the
Securities Act.

(c) The Purchaser has received and reviewed copies of the
Company's Forms 10-K (year ending 1994), 10-Q (quarter ending March 31, 1994),
8-Ks filed in calendar year 1995 prior to the date hereof, and a copy of the
Confidential Information Memorandum dated March 1995 prepared by Jesup & Lamont
Capital Markets, Inc.

<PAGE> 12
(d) The Purchaser hereby represents that neither it nor
any group (as such term is defined in the Securities Exchange Act) of persons
of which it is a part has any plans or proposals which relate to or would
result in an extraordinary corporate transaction (such as a merger,
reorganization or liquidation) involving the Company or the acquisition by any
person of securities of the Company enabling such person, such group and/or the
Purchaser to control or own 40% or more of the Common Stock of the Company (on
a fully-diluted basis).

5.2. Covenants.

The Purchaser hereby agrees that it shall not acquire, alone,
or together with a group (as defined in Section 13 of the Securities Exchange
Act), securities of the Company enabling the Purchaser or such group to control
or own 40% or more of the Common Stock of the Company, unless such acquisition
is approved by the Board of Directors of the Company.

SECTION 6. RESTRICTIONS ON TRANSFER

(a) The Purchaser agrees that it will not sell or otherwise
dispose of any Shares or Conversion Shares unless

(i) such Shares or Conversion Shares have been registered
under the Securities Act and, to the extent required, under
any applicable state securities laws, or

(ii) such Shares or Conversion Shares are sold in accordance
with the applicable requirements and limitations of Rule 144
or Rule 144A, or

(iii) the Company has been furnished with an opinion or
opinions from counsel to the Purchaser (which counsel and
which opinion(s) shall be reasonably satisfactory to the
Company and which counsel may be inside counsel to the
Purchaser) to the effect that registration under the
Securities Act is not required for the transfer as proposed
(which opinion may be conditioned upon the transferee assuming
the obligations of a holder of Shares or Conversion Shares
under this Section) or

(iv) the Company has been furnished with a letter from the
Division of Corporate Finance of the Commission to the effect
that such Division would not recommend any action to the
Commission if such proposed transfer were effected without a
registration statement effective under the Securities Act.

<PAGE> 13

The Company agrees that within five (5) Business Days after receipt of any
opinion referred to in (iii) above, it will notify the holder supplying such
opinion whether such opinion is satisfactory to the Company's counsel. Any
transfer of Conversion Shares shall also be subject to the Stockholders'
Agreement.

(b) The Company may endorse on all certificates evidencing
Shares or Conversion Shares a legend stating or referring to the transfer
restrictions contained in paragraph (a) above; provided, that no such legend
shall be endorsed on any certificates which, when issued, are no longer subject
to the restrictions of this Section 6; provided, further, that if a transfer is
made pursuant to clause (i), (ii) (other than pursuant to Rule 144A) or (iv) of
paragraph (a) or if an opinion of counsel provided pursuant to clause (iii) of
paragraph (a) concludes that the legend is no longer necessary, the Company
will deliver upon transfer, certificates without such legends.

SECTION 7. COVENANTS OF THE COMPANY

The Company covenants and agrees as follows:

7.1. Office for Payment, Exchange and Registration; Location of
Office.

So long as any of the Shares is outstanding, the Company will
maintain an office or agency where Shares may be presented for payment,
exchange, conversion or registration of transfer as provided in this Agreement.
Such office or agency initially shall be the office of the Company set forth on
the signature page hereto.

7.2. Reservation of Shares. There have been reserved, and
the Company shall at all times keep reserved, free from preemptive rights, out
of its authorized Common Stock, $.0001 par value per share, a number of shares
of Common Stock, $.0001 par value per share, sufficient to provide for the
exercise of the conversion rights provided in Sections 7 of the Certificate of
Designations.

7.3. Listing of Shares. If any shares of the Company's
Common Stock or Convertible Preferred Stock are listed on any national
securities exchange (or on the National Association of Securities Dealers,
Inc., Automated Quotation System or comparable system), then the Company will
take such action as may be necessary, from time to time, to list Shares or
Conversion Shares, as the case may be, on such exchange (or system as the case
may be).

7.4. Securities Exchange Act Registration. As soon as the
Company is either required to or does file a registration statement with
respect to the Company's Common Stock or Convertible Preferred Stock under
Section 6 of the Securities Act or Section 12(b) or Section 12(g), whichever is
applicable, of the Securities Exchange Act, then, thereafter:

<PAGE> 14
(a) The Company will maintain effective a registration
statement (containing such information and documents as the Commission shall
specify and otherwise complying with the Securities Exchange Act) under Section
12(b) or Section 12(g), whichever is applicable, of the Securities Exchange
Act, with respect to the Company's Common Stock or Convertible Preferred Stock,
as the case may be, and will file on time such information, documents and
reports as the Commission may require or prescribe for companies whose stock
has been registered pursuant to such Section 12(b) or Section 12(g), whichever
is applicable.

(b) The Company will, upon the request of any holder of Shares
or Conversion Shares, make whatever other filings with the Commission, or
otherwise make generally available to the public such financial and other
information, as any such holder may deem reasonably necessary or desirable in
order to enable such holder to be permitted (i) to sell Conversion Shares
pursuant to the provisions of Rule 144 and (ii) if the Company has filed a
Registration Statement with respect to Convertible Preferred Stock under
Section 6 of the Securities Act or Section 12(b) or 12(g) of the Securities
Exchange Act, to sell Shares pursuant to the provisions of Rule 144.

7.5. Private Placement Status. Neither the Company nor any
agent nor other Person acting on the Company's behalf will do or cause to be
done (or will omit to do or to cause to be done) any act which act (or which
omission) would result in bringing the issuance or sale of the Shares or the
Conversion Shares within the provisions of Section 5 of the Securities Act or
the filing, notification or reporting requirements of any state securities law
(other than in accordance with a registration and qualification of Conversion
Shares pursuant to Section 8 hereof).

7.6. Delivery of Information. If a holder of Shares or
Conversion Shares proposes to transfer any such Shares or Conversion Shares
pursuant to Rule 144A, the Company agrees to provide (upon the request of such
holder or the prospective transferee) to such holder and (if requested) to the
prospective transferee any information concerning the Company and its
Subsidiaries which is required to be delivered to any transferee of such Shares
or Conversion Shares pursuant to such Rule 144A.

7.7. Financial Reports. The Company will deliver to the
Purchaser:

(a) as soon as made available, copies of all Forms 10-K,
10-Q, 8-K, financial statements, proxy statements, reports which the Company
has sent to its stockholders or filed with the Commission or any national
securities exchange; and

(b) copies of any notice sent to the Senior Lender
notifying the Senior Lender of the occurrence of a default or event of default
under the terms of the Senior Credit Agreement, together with any supporting
statements attached thereto and delivered to the Senior Lender.

<PAGE> 15
7.8. Election of Directors. So long as there are at least
100,000 shares of Series A Preferred Stock outstanding or so long as the
Purchaser and its affiliates (together with the directors, officers and
employees of the Purchaser and its affiliates) own beneficially a number of
shares of capital stock of the Corporation which (assuming any conversion
rights are exercised) would give the Purchaser, its affiliates and such
persons, collectively, five percent (5%) or more of the combined voting power
of all shares of capital stock then outstanding (for this purpose, Common Stock
issuable upon conversion of then outstanding Series A Preferred Stock and
Series B Preferred Stock shall be deemed to be outstanding) entitled to vote
generally at any meeting of stockholders at which directors are to be elected
the Corporation will use its best efforts to cause to be elected to its board
of directors (and in addition to any other directors elected by the holders of
the Series A Preferred Stock), from the date hereof until the next such meeting
of stockholders, one person, and thereafter, a total of two persons nominated
by the Purchaser or its designee, who shall serve at all times during such
respective periods. In the event a vacancy occurs in the office of a director
so nominated by the Purchaser (or its designee), the Corporation shall use its
best efforts to cause to be elected to its board of directors a successor
nominated by the Purchaser or its designee who shall serve at all times during
such period.

SECTION 8. REGISTRATION RIGHTS

8.1. Registration at the Request of Holders.

(a) The Company agrees that on or after July 31, 1996,
upon receipt by the Company of a Registration Demand satisfying the conditions
under Section 8.1(b) hereof, the Company will (A) promptly (at least thirty
(30) days prior to the filing date) give written notice of the proposed
registration to each holder of a Share or Conversion Share, and (B) with
reasonable promptness, and in any case not later than ninety (90) days after
receipt by the Company of the Registration Demand, use reasonable efforts to
file as soon as practicable a registration statement with the Commission
relating to the Conversion Shares as to which registration is requested in the
Registration Demand. The Company shall use its reasonable best efforts to make
such registration statement become effective and to qualify the same under the
Blue Sky laws of such states as may be requested; provided, however, that with
respect to compliance with Blue Sky laws, the Company shall not be obligated to
qualify as a foreign corporation or to execute or file any general consent to
service of process under the laws of any such state where it is not so subject.
The Company shall also include under such registration statement (and in such
state qualifications) any Conversion Shares requested to be so included by any
other holder of Shares or Conversion Shares by written notice delivered to the
Company within thirty (30) days after the sending of the notice provided for in
(A) above.

(b) A "Registration Demand" means a written notice from
one or more holders of Shares or Conversion Shares stating that such holder or
holders desire to sell all of their Conversion Shares under circumstances
requiring registration under the Securities

<PAGE> 16
Act and requesting that the Company effect registration with respect to all of
the Conversion Shares held, or to be held after conversion of Shares, by such
holder or holders; provided, that such holder or holders giving such notice
hold Shares or Conversion Shares representing, or entitling the holder thereof
to obtain upon conversion, in the aggregate not less than fifty-one percent
(51%) of the number of Conversion Shares then obtainable upon conversion of all
Shares then outstanding; provided that such holder or holders hold at least
1,000,000 Conversion Shares in the aggregate (as such number may be adjusted
from time to time hereafter as a result of a stock split, combination, etc.).

(c) The Company is obligated to effect registration and
qualification pursuant to this Section 8.1 no more than two times.

(d) If the holder or holders who gave the Registration
Demand under this Section 8.1 inform the Company by written notice that they
are withdrawing their Registration Demand and pay all of the Company's
out-of-pocket expenses with respect to such registration and qualification
incurred to the date of the notice under this Section 8.1(d), then the
registration statement need not be filed and the whole effort will not count as
a registration and qualification (or a conversion of rights) under this Section
8.1.

(e) The Company may, upon written notice to the holder or
holders giving a Registration Demand, require such holder or holders to
withdraw such Registration Demand upon the good faith determination by the
Company that such postponement is necessary (i) to avoid disclosure of
non-public information or (ii) as a result of a pending financial transaction,
and in each case, the holders may not make another Registration Demand for a
period of up to ninety (90) days, as specified by the Company in such notice;
provided that the Company may exercise this right not more than once in any
12-month period. The Company may only given such a notice where the giving of
such a notice has been specifically approved by the Company's Board of
Directors. Upon receipt of any such written notice from the Company, such
Registration Demand shall be deemed to be rescinded and retracted (subject to
being given again after any holdback period specified in such notice in
accordance with the second preceding sentence) and shall not be counted as, or
deemed or considered to be or to have been, a Registration Demand for any
purpose.

8.2. Piggyback Rights.

(a) If the Company at any time proposes to file a
registration statement under the Securities Act for any sales of at least
300,000 shares (as such number may be adjusted from time to time hereafter as a
result of a stock split, combination, etc.) of the Company's Common Stock (or
any warrants, units, convertibles, rights or other securities related or linked
to any shares of the Company's Common Stock) on behalf of the Company or
otherwise, the Company shall give written notice of such registration no later
than thirty (30) days before its filing with the Commission to all holders of
Shares or Conversion Shares; provided, that registrations relating solely to
securities to be issued by the Company in connection with any employee stock
option or employee stock purchase or savings plan

<PAGE> 17
on Form S-8 (or successor forms) under the Securities Act shall not be subject
to this Section 8.2. If holders of Shares or Conversion Shares so request
within thirty (30) days, the Company shall include in any such registration the
Conversion Shares held or to be held after conversion of Shares by such holders
and requested to be included in such registration, subject to Section 8.2(b)
hereof.

(b) The Company shall not be obligated to so include the
Conversion Shares to the extent any underwriter or underwriters of such
securities being otherwise registered by the Company determines in good faith
that the inclusion of such Conversion Shares would jeopardize the successful
sale of such other securities proposed to be sold by such underwriter or
underwriters, in which case holders of Shares or Conversion Shares desiring to
participate in such registration shall be entitled to participate in any such
reduced number of Conversion Shares (if any) which may be included in such
registration (along with other holders of Common Stock exercising piggyback
rights with respect to such registration) in proportion to the amount of shares
of the Company's Common Stock held by such holders (whether held directly or
through the right to obtain Conversion Shares upon conversion of Shares held by
such holders).

(c) The obligations and rights of the Company and the
holders under this Section 8.2 shall not affect in any way their obligations
and rights under Section 8.1 hereof.

(d) The Company may propose including Common Stock to be
publicly offered and sold by it in any registration statement to be filed
pursuant to a Registration Demand under Section 8.1. If, in the written
opinion of underwriters selected for the proposed offering, the inclusion of
the securities proposed to be offered and sold by both the Company and the
holders of Shares or Conversion Shares would jeopardize the success of the
offering, the selling holders may elect (i) to exclude the amount of securities
(up to all of the securities) proposed to be sold by the Company which, in the
opinion of such underwriters, would jeopardize the success of the offering by
the selling holders, or (ii) to convert their proposed offering to an offering
pursuant to this Section 8.2. If the selling holders elect to convert the
offering to one under this Section 8.2, then such registration shall not be
deemed (or counted as) a registration and qualification (or a conversion of
rights) under Section 8.1 hereof.

8.3. Expenses.

Subject to the limitations contained in this Section 8.3 and
except as otherwise specifically provided in this Section 8, the entire costs
and expenses of registration and qualification pursuant to Section 8.1 hereof
and of registration and qualification pursuant to Section 8.2 hereof shall be
borne by the Company. Such costs and expenses shall include, without
limitation, underwriting fees or commissions in connection with the
registration and qualification pursuant to Section 8.1 hereof (other than with
respect to the Conversion Shares to be sold by the holders of Shares or
Conversion Shares, as to which underwriting

<PAGE> 18
discounts and commissions shall be paid by the selling holders), the fees and
expenses of counsel for the Company and of its accountants, all other costs,
fees and expenses of the Company incident to the preparation, printing,
registration and filing under the Securities Act of the registration statement
and all amendments and supplements thereto, up to $20,000 of reasonable fees
and expenses of one counsel to the holders of Shares or Conversion Shares
relating to such registration and qualification, the cost of furnishing copies
of each preliminary prospectus, each final prospectus and each amendment or
supplement thereto to underwriters, dealers and other purchasers of the
Conversion Shares and the costs and expenses (including reasonable fees and
disbursements of counsel) incurred in connection with the qualification of the
Conversion Shares under the Blue Sky laws of various jurisdictions; provided,
however, that if any jurisdiction in which the Company shall qualify or
register in connection with the proposed sale of the Conversion Shares shall
require that expenses incurred in connection with the qualification or
registration of such Conversion Shares in that jurisdiction be borne in whole
or in part by the holders selling those Conversion Shares, then such expenses
shall be payable by such holders pro rata to the extent required by such
jurisdiction and in the event that any such holder is required by any such
applicable jurisdiction to bear such expense, the Company shall promptly
reimburse each such holder for the amount paid therefor.

8.4. Procedures.

(a) In the case of each registration or qualification
pursuant to Section 8.1 or 8.2, the Company will keep all holders of Shares or
Conversion Shares advised in writing as to the initiation of proceedings for
such registration and qualification and as to the completion thereof, and will
advise any such holder, upon request, of the progress of such proceedings.

(b) At the Company's expense, the Company will keep each
registration and qualification under this Section 8 effective (and in
compliance with the Securities Act) by such action as may be necessary or
appropriate for a period of one hundred twenty (120) days after the effective
date of such registration statement, including, without limitation, the filing
of post-effective amendments and supplements to any registration statement or
prospectus necessary to keep the registration statement current and the further
qualification under any applicable Blue Sky or other state securities laws to
permit such sale or distribution, all as requested by such holder or holders.

(c) The Company will immediately notify each holder on
whose behalf Conversion Shares have been registered pursuant to this Section 8,
at any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of which
the prospectus included in such registration-statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing.

<PAGE> 19
(d) The Company will furnish to each holder on whose
behalf Conversion Shares have been registered pursuant to this Section 8 a
signed counterpart, addressed to such holder, of an opinion of counsel for the
Company, dated the effective date of such registration statement.

(e) Without limiting any other provision hereof, in
connection with any registration of Conversion Shares under this Section 8, the
Company will use its reasonable best efforts to comply with the Securities Act,
the Securities Exchange Act and all applicable rules and regulations of the
Commission, and will make generally available to its securities holders, as
soon as reasonably practicable, an earnings statement covering a period of at
least twelve (12) months, beginning with the first month of the first fiscal
quarter after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act.

(f) In connection with any registration of Conversion
Shares under this Section 8, the Company will provide a transfer agent and
registrar for the Conversion Shares not later than the effective date of such
registration statement.

(g) The Company shall not be required to include any of
the holders' Conversion Shares in an underwritten offering of the Company's
securities unless such holders accept the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it, which terms shall
include customary provisions with respect to indemnification and contribution
and customary representations and warranties by the Company (which shall be
made to and for the benefit of the underwriters and the holders of Conversion
Shares to be sold in such offering).

(h) In connection with the preparation and filing of each
registration statement registering Conversion Shares under this Section 8, the
Company will give the holders of Shares or Conversion Shares on whose behalf
such Conversion Shares are to be so registered and their underwriters, if any,
and their respective counsel and accountants, the opportunity to participate in
the preparation of such registration statement, each prospectus included
therein or filed with the Commission, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
such opportunities to discuss the business of the Company with its officers,
its counsel and the independent public accountants who have certified its
financial statements, as shall be reasonably necessary, in the reasonable
opinion of such holders or such underwriters or their counsel, in order to
conduct a reasonable and diligent investigation within the meaning of the
Securities Act.

8.5. Indemnification.

The Company will indemnify and hold harmless each holder of
Shares or Conversion Shares and any underwriter (as defined in the Securities
Act) for such holder and each person, if any, who controls the holder or
underwriter within the meaning of the

<PAGE> 20
Securities Act against any losses, claims, damages or liabilities, joint or
several, and expenses (including reasonable attorneys' fees and expenses and
reasonable costs of investigation) to which the holder or underwriter or such
controlling person may be subject, under the Securities Act or otherwise,
insofar as any thereof arise out of or are based upon (a) any untrue statement
or alleged untrue statement of a material fact contained in (i) any
registration statement under which such Conversion Shares were registered under
the Securities Act pursuant to Section 8.1 or 8.2 hereof, any prospectus or
preliminary prospectus contained therein, or any amendment or supplement
thereto, or (ii) any other document incident to the registration of the
Conversion Shares under the Securities Act or the qualification of the
Conversion Shares under any state securities laws applicable to the Company, or
(b) the omission or alleged omission to state in any item referred to in the
preceding clause (a) a material fact required to be stated therein or necessary
to make the statements therein not misleading or (c) any violation or alleged
violation by the Company of the Securities Act, the Securities Exchange Act or
any other federal or state securities law, rule or regulation applicable to the
Company and relating to action or inaction by the Company in connection with
any such registration or qualification, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or alleged untrue statement or omission or alleged omission based
upon information furnished to the Company in writing by such holder or by any
underwriter for such holder expressly for use therein (with respect to which
information such holder or underwriter shall so indemnify and hold harmless the
Company, any underwriter for the Company and each person, if any, who controls
the Company or such underwriter within the meaning of the Securities Act).

8.6. Holdback.

Except for transfers made in transactions exempt from the
registration requirements under the Securities Act pursuant to Section 4(2)
thereof or pursuant to Rule 144A, the Company and each holder of Shares or
Conversion Shares agrees not to offer, sell, contract to sell or otherwise
dispose of any of their respective shares of the Company's Common Stock within
seven (7) days before or one hundred eighty (180) days after the date of any
final prospectus relating to any underwritten public offering of the Company's
Common Stock on behalf of the Company or otherwise, in each case except
pursuant to such prospectus or with the written consent of underwriters for
such offering.

SECTION 9. CONDITIONS TO PURCHASER'S OBLIGATIONS

The Purchaser's obligation to purchase Shares hereunder is
subject to satisfaction of the following conditions at the Closing (any of
which may be waived by the Purchaser):

9.1. Certificate of Designations. The certificate of
incorporation of the Company shall have been duly amended by the filing of the
Certificate of Designations in the form attached hereto as Exhibit A.

<PAGE> 21

9.2. Accuracy of Representations and Warranties. The
representations and warranties of the Company in the Share Purchase Agreements
or in any certificate or document delivered pursuant hereto or thereto shall be
correct and complete on and as of the Closing Date with the same effect as
though made on and as of the Closing Date (after giving effect to transactions
contemplated by this Agreement).

9.3. Proceedings. All corporate and other proceedings in
connection with the transactions contemplated by the Share Purchase Agreements,
and all documents incident thereto, shall be in form and substance satisfactory
to the Purchaser and its counsel, and the Purchaser shall have received all
such originals or certified or other copies of such documents as the Purchaser
or its counsel may reasonably request.

9.4. Senior Credit Agreement. The Company and Norwest Bank,
National Association, shall have executed and delivered the Senior Credit
Agreement, which shall be in full force and effect and the Company shall have
made a borrowing thereunder sufficient, together with proceeds from the sale of
Series A Preferred Stock, the Series B Preferred Stock, certain Subordinated
Notes due October 1, 1996 and certain Subordinated Notes due July 30, 1996, to
close under the terms of the Acquisition Agreement.

SECTION 10. BROKERS

Except for certain fees payable to Jesup & Lamont Capital
Markets, Inc. (all of which fees will be paid by the Company), the Company
represents and warrants to the Purchaser that there is no liability for (and
the Company will pay and indemnify the Purchaser against) any fees or expenses
(or claims therefor) of any investment banker, finder or broker in connection
with any Share Purchase Agreement or any of the transactions contemplated
hereby or thereby. The Company will indemnify the Purchaser against all such
fees or expenses payable to the enumerated persons in the preceding sentence
and against any other such fees, expenses or claims of any person, unless such
person was engaged by the Purchaser in connection with this Agreement or any of
the transactions contemplated hereby.

SECTION 11. BREACH OF REPRESENTATIONS, WARRANTIES AND COVENANTS

(a) The representations, warranties, covenants and agreements
of the Company and the Purchaser contained in this Agreement or in any document
or certificate delivered pursuant hereto or thereto or in connection herewith
shall survive, and shall continue in effect following, the execution and
delivery of the Share Purchase Agreements, the closings hereunder and
thereunder, any investigation at any time made by the Purchaser or on its
behalf or by any other Person, the issuance, sale and delivery of the Shares,
any disposition thereof and any payment, conversion or cancellation of the
Shares. All statements contained in any certificate or other document
delivered by or on behalf of the

<PAGE> 22
Company pursuant hereto shall constitute representations and warranties by the
Company hereunder.

(b) The Company agrees to indemnify and hold the Purchaser
harmless from and against and will pay to the Purchaser the full amount of any
loss, damage, liability or expense (including amounts paid in settlement and
attorneys' fees and expenses) to the Purchaser resulting either directly or
indirectly from any breach of the representations, warranties, covenants or
agreements of the Company contained in any Share Purchase Agreement.

SECTION 12. SPECIFIC PERFORMANCE

The parties agree that irreparable damage will result in the
event that this Agreement is not specifically enforced, and the parties agree
that any damages available at law for a breach of this Agreement would not be
an adequate remedy. Therefore, the provisions hereof and the obligations of
the parties hereunder shall be enforceable in a court of equity, or other
tribunal with jurisdiction, by a decree of specific performance, and
appropriate injunctive relief may be applied for and granted in connection
therewith. Such remedies and all other remedies provided for in this Agreement
shall, however, be cumulative and not exclusive and shall be in addition to any
other remedies which a party may have under this Agreement or otherwise.

SECTION 13. HOME OFFICE PAYMENTS

As long as the Purchaser or any institutional holder which is
a direct or indirect transferee (as a result of one or more transfers) from the
Purchaser shall be the holder of any Share, the Company will make all
redemption payments, liquidation payments and other distributions by wire
transfer to the Purchaser's or such other holder's (or its nominees) account at
any bank or trust company in the United States of America, notwithstanding any
contrary provision herein or in the Company's certificate of incorporation with
respect to the place of payment. The Purchaser has provided an address on
Schedule 1 hereto for payments by wire transfer and for delivery of pay-in-kind
securities, and such address may be changed for the Purchaser or any subsequent
holder by notice to the Company. All such payments shall be made in U.S.
dollars and in federal or other immediately available funds.

SECTION 14. AMENDMENTS AND WAIVERS

(a) The terms and provisions of this Agreement may be
amended, waived, modified or terminated only with the written consent of the
Majority Shareholders; provided, however, that no such amendment, waiver,
modification or termination shall (i) change the

<PAGE> 23
registration rights under Section 8 hereof, without the consent of the holder
of the Conversion Share or Share so affected or (ii) reduce the aforesaid
percentage of Shares and Conversion Shares, the holders of which are required
to consent to any such amendment, waiver, modification or termination, without
the written consent of the holders of all the Shares and Conversion Shares then
outstanding.

(b) The Company agrees that all holders of Shares and
Conversion Shares shall be notified by the Company in advance of any proposed
amendment, waiver, modification or termination, but failure to give such notice
shall not in any way affect the validity of any such amendment, waiver,
modification or termination. In addition, promptly after obtaining the written
consent of the holders as herein provided, the Company shall transmit a copy of
any amendment, waiver, modification or termination which has been adopted to
all holders of Shares and Conversion Shares then outstanding, but failure to
transmit copies shall not in any way affect the validity of any such amendment,
waiver, modification or termination.

SECTION 15. EXCHANGE OF SHARES; CANCELLATION OF SURRENDERED
SHARES; REPLACEMENT

(a) Any Share certificate which is converted into Conversion
Shares in whole or in part shall be cancelled by the Company, and no new Share
certificates shall be issued in lieu of any Shares which have been converted
into Conversion Shares. The Company shall issue a new Share certificate with
respect to any Shares which were not converted into Converted Shares and were
represented by a certificate which was converted in part.

(b) Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of any Share certificate and, in the
case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory to the Company (if requested by the Company
and unsecured in the case of the Purchaser or an institutional holder), or in
the case of any such mutilation, upon surrender of such Share certificate
(which surrendered Share certificate shall be cancelled by the Company), the
Company will issue a new Share certificate, of like tenor in lieu of such lost,
stolen, destroyed or mutilated Share certificate as if the lost, stolen,
destroyed or mutilated Share certificate were then surrendered for exchange.

SECTION 16. NOTICES

All notices, requests, demands, consents and other
communications hereunder shall be in writing and shall be delivered by hand or
shall be sent by telex or telecopy (confirmed by registered, certified or
overnight mail or courier, postage and delivery charges prepaid), if to the
Company at the address indicated on the signature page hereof, or if to the
Purchaser at the address indicated on Schedule 1 hereto, or at such other
address as a

<PAGE> 24
party may from time to time designate as its address in writing to the other
party to this Agreement. Whenever any notice is required to be given
hereunder, such notice shall be deemed given and such requirement satisfied
only when such notice is delivered or, if sent by telex or telecopier, when
received.

SECTION 17. MISCELLANEOUS

(a) The Share Purchase Agreements and, upon the closing
hereunder, the Certificate of Designations, together with any further
agreements entered into by the Purchaser and the Company at the closing
hereunder, contain the entire agreement between the Purchaser and the Company,
and supersede any prior oral or written agreements, commitments, terms or
understandings, regarding the subject matter hereof.

(b) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law
which may render any provision hereof prohibited or unenforceable in any
respect.

(c) Any provision of this Agreement relating to the consent,
determination, decision or waiver of a holder or holders of Shares or
Conversion Shares means such holder's consent, determination, decision or
waiver in such holder's sole discretion.

(d) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and its respective successors and assigns,
whether so expressed or not; provided, that the Company may not assign any of
its rights, duties or obligations under this Agreement, except with the
Purchaser's written consent.

(e) In addition to any assignment by operation of law, the
Purchaser may assign, in whole or in part, any or all of its rights (and/or
obligations) under this Agreement to any of its affiliates or any officer,
director or employee of either itself or any of its affiliates of any or all of
its Shares or Conversion Shares, and (unless such assignment expressly provides
otherwise) any such assignment shall not diminish the rights the Purchaser
would otherwise have under this Agreement or with respect to any remaining
Shares or Conversion Shares held by the Purchaser.

(f) No course of dealing and no delay on the part of any
party hereto in exercising any right, power, or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies. No single or partial exercise of any rights,
powers or remedies conferred by this Agreement shall preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.

<PAGE> 25

(g) The headings and captions in this Agreement are for
convenience of reference only and shall not define, limit or otherwise affect
any of the terms or provisions hereof.

(h) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (other than any conflict of
laws rule which might result in the application of the laws of any other
jurisdiction).

(i) This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one counterpart.

(j) CONSENT TO JURISDICTION. EACH PARTY CONSENTS TO THE
PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF
TEXAS IN CONNECTION WITH ANY CONTROVERSY RELATED TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, WAIVES ANY ARGUMENT THAT VENUE IN ANY SUCH FORUM IS NOT
CONVENIENT, AND AGREES THAT ANY LITIGATION INITIATED BY ANY OF THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT SHALL BE
VENUED IN EITHER THE DISTRICT COURT OF DALLAS COUNTY, TEXAS, OR THE UNITED
STATES DISTRICT COURT, NORTHERN DISTRICT OF TEXAS.

(k) WAIVER OF JURY TRIAL. THE COMPANY AND THE PURCHASER
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.

Address: SA HOLDINGS, INC.

Attn: General Counsel By /s/ Jack Matz
-----------------------------
Name: Jack Matz
Title: Chief Executive Officer

Accepted and Agreed to as of the
date first above written by the
undersigned Purchaser:

JESUP & LAMONT CAPITAL MARKETS, INC.

By /s/ Howard F. Curd
-----------------------------
Name: Howard F. Curd
Title: Executive Vice President

<PAGE> 27

Schedule 1 to the Share Purchase Agreement

<TABLE>
<CAPTION>
Number of Shares
of Convertible Purchase
Name of Purchaser Preferred Stock Price
- ----------------- ---------------- --------
<S> <C> <C>
Name: Jesup & Lamont Capital
Markets, Inc. 166,667 $1,500,000

(a) address for communications:
650 Fifth Avenue
New York, NY 10019
Attn:

(b) address for payments by wire
transfer:
</TABLE>

<PAGE> 28
EXHIBIT A

CERTIFICATE OF DESIGNATIONS

<PAGE> 29
Exhibit A

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
($.00001 PAR VALUE PER SHARE)

SA HOLDINGS, INC.

-------------------

Pursuant to Section 151(g) of the
General Corporation Law of the
State of Delaware

--------------------

I, Jack W. Matz, Jr., Chief Executive Officer of SA holdings, INC.
(hereinafter called the "Corporation"), a corporation organized and existing
under and by virtue of the provisions of the General Corporation Law of the
State of Delaware,

DO HEREBY CERTIFY:

FIRST: The Certificate of Incorporation, as amended (the "Certificate
of Incorporation"), of the Corporation authorizes the issuance of 12,500,000
shares of preferred stock, $.00001 par value per share ("Preferred Stock"), in
one or more series, and further authorizes the Board of Directors of the
Corporation to provide by resolution for the issuance of shares of Preferred
Stock in one or more series not exceeding the aggregate number of shares of
Preferred Stock authorized by the Certificate of Incorporation and to determine
with respect to each such series, the voting powers, if any (which voting
powers if granted may be full or limited), designations, preferences, the
relative, participating, optional and other rights, and the qualifications,
limitations and restrictions appertaining thereto.

SECOND: A resolution providing for and in connection with the issuance
of the Preferred Stock was duly adopted by the Board of Directors of the
Corporation pursuant to authority conferred on the Board of Directors by the
provisions of the Certificate of Incorporation as aforesaid, which resolution
provides as follows:

RESOLVED: that the Board of Directors, pursuant to authority vested in
it by the provisions of the Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), of SA Holdings, Inc. (the "Corporation"), the
authorizes the

<PAGE> 30
issuance of a series of convertible preferred stock ("Convertible Preferred
Stock") of the Corporation and hereby establishes the powers, designations,
preferences, the relative, participating, optional and other rights, and the
qualifications, limitations and restrictions appertaining thereto in addition to
those set forth in such Certificate of Incorporation (or otherwise provided by
law) as follows (the following, referred to hereinafter as "this resolution" or
"this Certificate of Designations", is to be filed as part of a Certificate of
Designations under Section 151(g) of the General Corporation Law of the
State of Delaware):

1. General.

(a) Designation and Number. The designation of Convertible Preferred Stock
created by this resolution shall be Series A Cumulative Convertible Preferred
Stock, $.00001 par value per share, of the Corporation (hereinafter referred to
as the "Series A Preferred Stock"), and the number of shares of Series A
Preferred Stock which the Corporation shall be authorized to issue shall be
250,000 shares.

(b) Priority. The Series A Preferred Stock shall rank prior to the Common
Stock (as hereinafter defined), and to all other capital stock of the
Corporation (now or hereafter authorized or issued), other than the Series B
Cumulative Convertible Preferred Stock of the Corporation (the "Series B
Preferred Stock") with which it shall rank pari passu, in each case as to
dividends or upon liquidation, dissolution or winding up.

2. Certain Definitions.

(a) For purposes of this Certificate of Designations, the following terms
shall have the meanings indicated:

(i) "Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Texas are authorized or
obligated by law or executive order to close.

(ii) "Commission" means the Securities and Exchange Commission and any
other similar or successor agency of the federal government administering
the Securities Act or the Securities Exchange Act.

(iii) "Common Shares" has the meaning set forth in Section 7(a)
hereof.

(iv) "Common Stock" means the Corporation's Common Stock, as presently
authorized by the Certificate of Incorporation and as such Common Stock may
hereafter be changed or for which such Common Stock may be exchanged after
giving effect to the terms of such change or

<PAGE> 31
exchange (by way of reorganization, recapitalization, merger, consolidation or
otherwise).

(v) The phrase "current conversion price" has the meaning set forth in
Section 7(h) hereof.

(vi) "Event of Default" means (A) the failure by the Corporation to
redeem shares of Series A Preferred Stock in accordance with the provisions of
Section 6(a) or 6(b) hereof for any reason, and such failure in such redemption
of such shares shall have continued for one hundred eighty (180) days or (B)
the equivalent of one year's dividend payments on all outstanding shares of
Series A Preferred Stock shall be accrued and unpaid, if funds are legally
available for the payment therefor, and such failure has continued for sixty
(60) days.

(vii) "full cumulative dividends" means as of any date the amount of
accumulated, accrued and unpaid dividends payable on shares of Series A
Preferred Stock as provided by Section 4 hereof, whether or not earned or
declared and whether or not there shall be funds legally available for the
payment thereof.

(viii) "Junior Preferred Stock" means capital stock (other than Common
Stock) of the Corporation ranking junior to the Series A Preferred Stock as to
dividends and upon liquidation, dissolution or winding up.

(xi) "Person" or "person" means an individual, corporation, partnership,
firm, association, joint venture, trust, unincorporated organization,
government, governmental body, agency, political subdivision or other entity.

(x) "Preferred Liquidation Value", has the meaning set forth in Section
5(a) hereof.

(xi) "Purchase Agreements" means the separate Share Purchase Agreements
dated as of July 31, 1995 between the Corporation and each of the original
holders of shares of Series A Preferred Stock (as from time to time assigned,
supplemented or amended or as the terms thereof may be waived, each in
accordance with its terms).

(xii) "Qualified Level of Public Trading" shall exist if, and only if, on
the date of notice of the Corporation's election of its right to redeem the
shares of Series A Preferred Stock pursuant to Section 6(b) hereof, (a) Common
Shares are listed or admitted to trading on a national securities exchange or
are traded on the National Association of Securities Dealers Inc.,

<PAGE> 32
Automated Quotation System Level 1, National Market System ("National
Market System") or in the over-the-counter market, and (b) either (i) the
last reported sale price regular way for Common Shares on the principal
national securities exchange on which Common Shares are listed or admitted
to trading or, if Common Shares are not listed or admitted to trading on
any national securities exchange, on the National Market System, or (ii) if
Common Shares are listed or admitted to trading on neither any national
securities exchange nor on the National Market System, the average of the
highest reported bid and lowest reported asked prices as furnished by the
National Association of Securities Dealers Inc., Automated Quotation System
Level I, or comparable system, shall (in the case of (i) or (ii)) have
equalled or exceeded an amount per share equal to at least 250% of the then
current conversion price for at least twenty (20) consecutive trading days.

(xiii) "Senior Credit Agreement" means the Term Credit Agreement
between the Corporation and NorWest Bank Minnesota, National Association,
dated as of July 31, 1995.

(xiv) "Subsidiary" means any corporation, association or other entity
of which more than 80% of the total voting power of shares of stock or
other equity interests entitled (without regard to the occurrence of any
contingency or any pledge of shares) to vote in the election of directors,
managers or trustees thereof is, at the time as of which any determination
is being made, owned or controlled, directly or indirectly, by the
Corporation or one or more of its Subsidiaries, or both.

(b) The words "hereof", "herein" and "hereunder" and other words of similar
import refer to this Certificate of Designations as a whole and not to any
particular Section or other subdivision.

(c) References herein to the Certificate of Incorporation include such
Certificate as amended by this Certificate of Designations.

3. Voting Rights.

(a) Generally No Voting Rights. Except as otherwise provided specifically
herein or by law, each share of Series A Preferred Stock shall have no voting
rights. To the extent holders of shares of Series A Preferred Stock have the
right to vote, each holder of shares of Series A Preferred Stock shall be
entitled to that number of votes for each share of Series A Preferred Stock held
by such holder equal to the number of Common Shares obtainable

<PAGE> 33
upon conversion of such share of Series A Preferred Stock pursuant to Section 7
hereof at the current conversion price on the record date for the vote which is
being taken or, if no such record date is established, at the date such vote is
taken or any written consent of stockholder is solicited.

(b) Consent Required. So long as any shares of the Series A Preferred
Stock remain outstanding, unless the vote or consent of the holders of a greater
number of shares shall then be required by law, the affirmative vote or consent
of the holders of at least fifty-one percent (51%) of all of the shares of
Series A Preferred Stock at the time outstanding, voting separately as a class,
given in person or by proxy either in writing (as may be permitted by law and
the Certificate of Incorporation and By-laws of the Corporation) or at any
special or annual meeting, shall be necessary to permit, effect or validate the
taking of any of the following actions by the Corporation;

(i) create, authorize or issue any class or series of capital stock
ranking prior to the Series A Preferred Stock as to dividends or upon
liquidation, dissolution or winding up;

(ii) amend the Certificate of Incorporation of the Corporation, or in
any other manner alter or change the powers, rights, privileges or
preferences of the Series A Preferred Stock, if such amendment or action
would adversely affect the powers, rights, privileges or preferences of the
holders of the Series A Preferred Stock; except that the Corporation may
amend the Certificate of Incorporation and/or the By-laws of the
Corporation to increase the amount of shares of Common Stock or amend the
terms of any Common Stock, or to create, authorize or issue shares of
Junior Preferred Stock;

(iii) amend this Certificate of Designations; or

(iv) approve and adopt any agreement, plan or proposal for the sale
and other disposition of all or substantially all of the assets and rights
of the Corporation other than in the ordinary course of business, or any
agreement, plan or proposal for the consolidation, merger or dissolution of
the Corporation (other than a merger of a subsidiary of the Corporation
into the Corporation in which the Corporation is the surviving corporation
or any other merger in which the Corporation is the surviving
corporation), or any agreement, plan or proposal for a share exchange which
is submitted to a vote of the stockholders of the Corporation.

<PAGE> 34
(c) Additional Voting Rights. (i) So long as there are at least 100,000
shares of Series A Preferred Stock then outstanding (subject to adjustment after
the date hereof for stock splits, combinations, etc.), upon the occurrence of an
Event of Default, the holders of the Series A Preferred Stock shall be entitled
to elect (as provided below) a number of directors to the Board of Directors of
the Corporation equal to the number obtained by (x) multiplying the (A) a
fraction, the numerator of which is the number of shares of Common Stock
obtainable upon conversion of all of the shares of Series A Preferred Stock then
outstanding and the denominator of which is the total number of shares of Common
Stock (on a fully-diluted basis) then outstanding, by (B) the number of
directors on the Board of Directors of the Corporation and then (y) rounding
such number down to the nearest whole number (except for any number below the
number 1, such number shall be rounded upward to 1 and not downward to zero).
The size of the Board of Directors of the Corporation shall be increased by such
number as may be necessary to allow for directors elected by the holders of the
Series A Preferred Stock. During the period (hereinafter in this Section 3(c)
called the "Class Voting Period") commencing upon the occurrence of such Event
of Default and ending at such time upon which no Event of Default shall
continue, the holders of at least fifty-one percent (51%) of the then
outstanding shares of Series A Preferred Stock, by the affirmative vote in
person or by proxy at a special meeting of stockholders called for such purpose
(or at any adjournment thereof) by holders of at least 25% of the then
outstanding shares of Series A Preferred Stock or at any annual meeting of
stockholders, or by written consent delivered to the Secretary of the
Corporation, with the holders of such Series A Preferred Stock voting as a class
and with each such share of Series A Preferred Stock having one vote, shall be
entitled, as a class, to the exclusion of the holders of all other classes or
series of capital stock of the Corporation, to elect such directors.

(ii) At any time when such voting right under this Section 3(c) shall
have vested in the holders of shares of Series A Preferred Stock entitled
to vote thereon, and if such right shall not already have been initially
exercised, an officer of the Corporation shall, upon the written request of
at least 25% of the holders of record of shares of the Series A Preferred
Stock then outstanding, addressed to the Treasurer (or similar officer) of
the Corporation, call a special meeting of holders of shares of the Series
A Preferred Stock. Such meeting shall be held at the earliest practicable
date upon the notice required for annual meetings of stockholders at the
place for holding annual meetings of stockholders of the Corporation or, if
none, at a place designated by the Treasurer (or similar officer) of the
Corporation. If such meeting shall not be called by the proper officers of
the Corporation within 30 days after the personal service of such written
request upon the Treasurer (or similar officer) of the

<PAGE> 35
Corporation, or within 30 days after mailing the same within the United
States, by registered mail, addressed to the Treasurer (or similar Officer)
of the Corporation at its principal office (such mailing to be evidenced by
the registry receipt issued by the postal authorities), then the holders of
record of at least 25% of the shares of Series A Preferred Stock then
outstanding may designate in writing any person to call such meeting at the
expense of the Corporation, and such meeting may be called by such person
so designated upon the notice required for annual meetings of stockholders
and shall be held at the same place as is elsewhere provided in this
paragraph or, if none, at a place designated by the person selected to call
the meeting. Any holder of shares of Series A Preferred Stock then
outstanding that would be entitled to vote at such meeting shall have
access to the stock books of the Corporation for the purpose of causing a
meeting of stockholders to be called pursuant to the provisions of this
paragraph.

(iii) Any director who shall have been elected by the holders of
Series A Preferred Stock pursuant to this Section 3(c) may be removed at
any time during a Class Voting Period, by the vote of the holders of at
least fifty-one percent (51%) of all of the then outstanding shares of
Series A Preferred Stock, voting as a separate class in person or by proxy
at a special meeting of stockholders called for such purpose by holders of
at least 25% of the outstanding shares of Series A Preferred Stock. Any
director who shall have been elected by the holders of Series A Preferred
Stock may not be removed at any time during a Class Voting Period without
the consent of the holders of at least fifty-one percent (51%) of all of
the outstanding shares of Series A Preferred Stock. Any vacancy created by
the removal, death or resignation of a director elected by the holders of
Series A Preferred Stock may be filled during such Class Voting Period by
the holders of at least fifty-one percent (51%) of all of the outstanding
shares of Series A Preferred Stock by vote in person or by proxy at a
special meeting of stockholders of the Corporation called for such purpose
by holders of at least 25% of the outstanding shares of Series A Preferred
Stock.

(iv) During the Class Voting Period, other than to increase the size
of the Board of Directors in accordance with clause (i) of this Section
3(c), the size of the Board of Directors of the Corporation shall not
otherwise be changed without the vote of the holders of at least fifty-one
percent (51%) of all of the then outstanding shares of Series A Preferred
Stock, voting as a separate class.

(v) At the end of the Class Voting Period, the holders of Series A
Preferred Stock shall be automatically divested of all voting power vested
in them under this Section 3(c) except

<PAGE> 36
as herein or by law expressly provided, subject always to the subsequent
vesting hereunder of such voting power in the holders of Series A Preferred
Stock upon the occurrence of any subsequent Event of Default. The term of
any director elected pursuant to the provisions of this Section 3(c) shall
in all events expire at the end of the Class Voting Period and the size of
the Board shall be reduced accordingly.

4. Dividend Rights.

(a) General Dividend Obligations. The Corporation shall pay, when and as
declared by the Corporation's Board of Directors, to the holders of the Series A
Preferred Stock, out of the assets of the Corporation legally available
therefor, stock dividends, payable in shares of Series A Preferred Stock (or at
the election of the Corporation, in cash) (provided that upon liquidation or
redemption, accrued and unpaid dividends will be paid in cash), at the times, in
the amounts and with such priorities as are provided for in this Section 4.
Notwithstanding the foregoing, without the consent of a majority in interest of
the lenders under the Senior Credit Agreement, no dividends may be paid in cash
to holders of the Series A Preferred Stock so long as indebtedness is
outstanding and unpaid under the Senior Credit Agreement.

(b) Accrual of Dividends. Dividends of each share of Series A Preferred
Stock shall accrue cumulatively on a daily basis from and including the issuance
of such share. The date on which the Corporation shall initially issue any share
of Series A Preferred Stock shall be deemed to be its "date of issuance"
regardless of the number of times transfer of such share of Series A Preferred
Stock shall be made on the stock records maintained by or for the corporation
and regardless of the number of certificates which may be issued to evidence
such share of Series A Preferred Stock (whether by reason of transfer of such
share of Series A Preferred Stock or for any other reason).

(c) Dividend Rates. Dividends shall accrue cumulatively on each share of
Series A Preferred Stock from the date of issuance at a rate per annum equal to
$0.72 per share of Series A Preferred Stock calculated on the basis of the
actual number of days elapsed in a year. Dividends paid in shares of Series A
Preferred Stock shall be paid assuming each share of Series A Preferred Stock
used to so pay has a value of $9.00.

(d) Payment Dates. Full cumulative dividends on the Series A Preferred
Stock shall be payable annually, on the last day of July in each year (each, a
"Dividend Payment Date"). The first dividend payment date shall be July 31,
1996. If any Dividend Payment Date shall be on a day other than a Business Day,
then the Dividend Payment Date shall be on the next succeeding Business Day. An
amount equal to the full cumulative dividends shall also be payable (in cash),
in satisfaction of such dividend obligation,

<PAGE> 37
upon liquidation as provided under Section 5, hereof, and upon redemption as
provided under Section 6 hereof.

(e) Amounts Payable. The amount of dividends payable on Series A Preferred
Stock on each Dividend Payment Date shall be the full cumulative dividends which
are unpaid through and including such Dividend Payment Date. Dividends which are
not paid for any reason whatsoever on a Dividend Payment Date shall cumulate
until paid and shall be payable on the next Dividend Payment Date on which
payment can lawfully be made (or upon liquidation or redemption as provided
herein). Holders of shares of Series A Preferred Stock called for redemption on
a redemption date falling between the close of business on a dividend payment
record date and the opening of business on the corresponding Dividend Payment
Date shall, in lieu of receiving such dividend payment on the Dividend Payment
Date fixed therefor, receive an amount equal to such dividend payment
(consisting of all accumulated and unpaid dividends through and including the
redemption date) on the date fixed for redemption. If for whatever reason all
payments have not been made with respect to any share of Series A Preferred
Stock as required by Section 5 on a distribution date or all payments have not
been made with respect to any share of Series A Preferred Stock as required by
Section 6 on a redemption date (other than because of a failure by the holder
thereof to tender such shares for payment on such date), then, notwithstanding
any other provision hereof, dividends shall continue to accumulate on such
outstanding shares until paid. Dividends paid by payment-in-kind shall not be
paid in fractional shares (all such fractional shares being rounded down to the
nearest whole number of shares); such dividends so rounded down shall be deemed
paid in full).

(f) Priority. So long as any shares of the Series A Preferred Stock are
outstanding if an Event of Default has occurred and is continuing or if an
Event of Default (as defined in the Senior Credit Agreement) has occurred and
is continuing, (A) no dividends shall be declared or paid or set apart for
payment and no other distribution shall be declared or made or set apart for
payment, in each case upon the Common Stock (other than dividends paid in
shares of Common Stock made to the holders of Common Stock), the Series A
Preferred Stock (other than dividends paid in shares of the Series A
Preferred Stock to the holders of the Series A Preferred Stock) or any Junior
Preferred Stock, and (B) no capital stock of the Company (other than the
Series A Preferred Stock) shall be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available for a
sinking fund or otherwise for the purchase or redemption of any shares of
any such stock) by the Corporation.

5. Liquidation Rights.

(a) Priority. (i) In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or

<PAGE> 38
involuntary, before any payment or distribution of the assets of the Corporation
(whether from capital or surplus) shall be made to or set apart for the holders
of Common Stock or any other shares of capital stock of the Corporation, the
holders of the shares of Series A Preferred Stock shall be entitled to receive
from the assets of the Corporation, whether represented by capital, surplus,
reserves or earnings, payment in cash of an amount (the "Preferred Liquidation
Value") equal to the greater of (i) $9.00 per share plus the value of accrued
and unpaid dividends per share through the date thereof of (ii) the amount per
share of Series A Preferred Stock that would have been payable had each such
share been converted to Common Shares immediately prior to such event of
liquidation, dissolution or winding-up pursuant to Section 7 hereof. If the
assets distributable upon such liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, shall be insufficient to permit
payment to the holders of the shares of Series A Preferred Stock of the full
preferential amounts as set forth in this Section 5(a), then such assets shall
be distributed ratably among the shares of Series A Preferred Stock.

(ii) if, in the event of any liquidation, dissolution or winding up of the
Corporation, the Preferred Liquidation Value of the Series B Preferred Stock and
the Preferred Liquidation Value of the Series A Preferred Stock are not paid in
full, the respective holders of the Series B Preferred Stock and of the Series A
Preferred Stock shall share ratably in any distribution of assets in proportion
to the full Preferred Liquidation Value to which each such series of Preferred
Stock is entitled.

(b) Junior Stock. After payment shall have been made in full to the
holders of Series A Preferred Stock as provided in this Section 5 upon any
liquidation, dissolution or winding up the Corporation, the Common Stock and any
other series or class or classes of stock of the Corporation shall, subject to
the respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid or distributed upon such
liquidation, dissolution or winding up, and the holders of Series A Preferred
Stock shall not be entitled to share therein.

(c) Notice of Liquidation. Written notice of any liquidation, dissolution
or winding up of the Corporation, stating the payment date or dates when and the
place or places where the amounts distributable in such circumstances shall be
payable, shall be given (not less than thirty (30) days prior to any payment
date stated therein), to the holders of record of the Series A Preferred Stock
at their respective addresses as the same shall appear on the stock register of
the Corporation.

(d) Liquidation. Neither the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock,

<PAGE> 39
securities or other consideration) of all or substantially all the property or
assets of the Corporation nor the consolidation, merger or other business
combination of the Corporation with or into one or more corporations shall be
deemed to be a liquidation, dissolution or winding-up, voluntary or
involuntary, of the Corporation.

6. Redemption.

(a) Mandatory Redemption. The Corporation shall redeem on July 31, 2000
all of the then outstanding shares of Series A Preferred Stock, in cash at a
price per share (the "Mandatory Redemption Price") equal to the sum of (A)
$9.00 plus (B) the value of accrued and unpaid dividends on such share through
such date.

(b) Special Optional Redemption. On or after July 31, 1997 (but not
before), if there has been a Qualified Level of Public Trading as of the date of
the notice provided for below, at the option of the Corporation, the Corporation
may redeem all or part of the shares of Series A Preferred Stock then
outstanding at a cash price per share equal to the sum of $9.00 plus the value
of accrued and unpaid dividends on such share through the date set for
redemption.

Notwithstanding the foregoing, without the consent of a majority in
interest of the lenders under the Senior Credit Agreement, the Corporation may
not redeem all or any part of the shares of Series A Preferred Stock pursuant to
the preceding sentence so long as indebtedness is outstanding and unpaid under
the Senior Credit Agreement.

Such option under this Section 6(b) shall be exercised by written notice to
the holders of Series A Preferred Stock given at any time not less than thirty
(30) days and not more than sixty (60) days prior to the date of such
redemption.

(c) Partial Redemption. In any such optional redemption by the
Corporation, if all shares of Series A Preferred Stock are not being redeemed,
then the number of shares of Series A Preferred Stock to be redeemed shall be
allocated among all shares of Series A Preferred Stock so that the shares of
Series A Preferred Stock are redeemed from such holders in proportion to the
respective number of shares of Series A Preferred Stock held by each such
holder (or in such other proportion as agreed by all such holders who accept
the Corporation's offer).

7. Conversion.

(a) General. Each holder of a share of Series A Preferred Stock shall have
the right, at the option of such holder, at any time to convert, upon the terms
and provisions of this Section 7, one or more shares of Series A Preferred
Stock into

<PAGE> 40
fully paid and nonassessable shares of Common Stock of the Corporation or any
capital stock or other securities into which such Common Stock shall have been
changed or any capital stock of other securities resulting from a
reclassification thereof (such shares, the "Common Shares"). Such conversion of
shares of Series A Preferred Stock to Common Shares shall be made at a
conversion rate of one share of Series A Preferred Stock for a number of Common
Shares equal to (x) $9.00 plus the value of accrued and unpaid dividends on such
share divided by (y) the then current conversion price, as further described
below. Every share of Series A Preferred Stock shall continue to be convertible,
in whole or in part, even though the Corporation or a holder may have given
notice of redemption with respect to such share of Series A Preferred Stock or
any part thereof pursuant to Section 6 hereof, so long as such share of Series A
Preferred Stock and the holder's election to convert shall have been delivered
to the Corporation pursuant to Section 7(c) hereof prior to the date fixed for
such redemption. The Common Shares issuable upon conversion of the shares of
Series A Preferred Stock, when such Common Shares shall be issued in accordance
with the terms hereof, are hereby declared to be and shall be duly authorized,
validly issued, fully paid and nonassessable Common Shares held by the holders
thereof.

(b) Reference to "Conversion". For convenience, the conversion pursuant
to this Section 7 of all or a part of the shares of Series A Preferred Stock
into Common Shares is herein sometimes referred to as the "conversion" of the
shares of Series A Preferred Stock.

(c) Surrender, Election and Payment. Each share of Series A Preferred
Stock may be converted by the holder thereof, in whole, or in part, during
normal business hours on any Business Day by surrender of the share of Series A
Preferred Stock, accompanied by written evidence of the holder's election to
convert the preferred share of Series A Preferred Stock or portion thereof, to
the Corporation at its office designated pursuant to Section 9 hereof (or, if
such conversion is in connection with an underwritten public offering of Common
Shares, at the location at which the underwriting agreement requires that such
Common Shares (or shares of Series A Preferred Stock) be delivered). Payment of
the conversion price for the Common Shares specified in such election shall be
made by applying an aggregate number of shares of Series A Preferred Stock equal
to the number obtained by dividing (x) the number of Common Shares specified in
such election by (y) the amount obtained by dividing (A) $9.00 by (B) the then
current conversion price. Such holder shall thereupon be entitled to receive the
number of Common Shares specified in such election (plus cash in lieu of any
fractional share as provided in Section 7(j) hereof).

(d) Effective Date. Each conversion of a share of Series A Preferred Stock
pursuant to Section 7(c) hereof shall be

<PAGE> 41
deemed to have been effected immediately prior to the close of business on the
Business Day on which such share of Series A Preferred Stock shall have been
surrendered to the Corporation as provided in Section 7(c) hereof (except that
if such conversion is in connection with an underwritten public offering of
Common Shares, then such conversion shall be deemed to have been effected upon
such surrender), and such conversion shall be at the current conversion price in
effect at such time. On each such day that the conversion of a share of Series A
Preferred Stock is deemed effected, the person or persons in whose name or names
any certificate or certificates for Common Shares are issuable upon such
conversion, as provided in Section 7(c) hereof, shall be deemed to have become
the holder or holders of record of such Common Shares.

(e) Share Certificates. As promptly as practicable after the conversion of
a share of Series A Preferred Stock, in whole or in part, and in any event
within five (5) Business Days thereafter (unless such conversion is in
connection with an underwritten public offering of Common Shares, in which event
concurrently with such conversion), the Corporation at its expense (including
the payment by it of any applicable issue, stamp or other taxes, other than any
income taxes) will cause to be issued in the name of and delivered to the holder
thereof or as such holder may direct, a certificate or certificates for the
number of Common Shares to which such holder shall be entitled upon such
conversion on the effective date of such conversion plus cash in lieu of any
fractional shares as provided in Section 7(j) hereof.

(f) Acknowledgment of Obligation. The Corporation will, at the time of or
at any time after each conversion of a share of Series A Preferred Stock, upon
the request of the holder thereof or of any Common Shares issued upon such
conversion, acknowledge in writing its continuing obligation to afford to such
holder all rights, if any, to which such holder shall continue to be entitled;
provided, that if any such holder shall fail to make any such request, the
failure shall not affect the continuing obligations of the Corporation to afford
such rights to such holder.

(g) Payment of Dividends. Within five (5) Business Days after receipt of
any share of Series A Preferred Stock and an election to convert all or a
portion of such share of Series A Preferred Stock under Section 7(c) hereof, the
Corporation will pay, out of funds legally available therefor, to the holder of
such share of Series A Preferred Stock in shares of Series A Preferred Stock or,
at the option of the Company, in cash, an amount equal to full cumulative
dividends accrued to the effective date of conversion of such shares of Series A
Preferred Stock.

(h) Current Conversion Price. The term "conversion price" shall mean
initially $1.125 per Common Share, subject to adjustment. The term "current
conversion price" as used herein

<PAGE> 42
shall mean the conversion price, as the same may be adjusted from time to time
as hereinafter provided, in effect at any given time. In determining the current
conversion price, the result shall be expressed to the nearest $0.01, but any
such lesser amount shall be carried forward and shall be considered at the time
of (and together with) the next subsequent adjustment which, together with any
adjustments to be carried forward, shall amount to $0.01 per Common Share or
more.

(i) Reservation of Shares of Common Stock. The Corporation shall at all
times reserve and keep available out of authorized but unissued the maximum
number of shares of Common Stock into which all shares of Series A Preferred
Stock from time to time outstanding are convertible, but shares of Common Stock
held in the treasury of the Corporation may, in its discretion, be delivered
upon any conversion of shares of Series A Preferred Stock.

(j) Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of Series A Preferred Stock, but, in lieu of any fraction
of a Common Share which would otherwise be issuable in respect of the aggregate
number of shares of Series A Preferred Stock surrendered by the holder thereof
for conversion, the holder shall have the right to receive an amount in cash
equal to the same fraction of the current Market Price (as defined below) on the
effective date of the conversion of such shares of Series A Preferred Stock.
Dividends payable pursuant to Section 7(g) above upon conversion of shares of
Series A Preferred Stock which are paid by payment-in-kind shall be paid with
cash in lieu of fractional shares to the extent of any fractional shares.

8. Adjustment to Conversion Price.

The conversion price shall be adjusted, from time to time, as follows:

<PAGE> 43
capital stock of the Corporation which such holder would have owned immediately
following such action had such share of Series A Preferred Stock been converted
immediately prior thereto (with any record date requirement being deemed to have
been satisfied), and, in any such case, such conversion price shall thereafter
be subject to further adjustments under this Section 8. An adjustment made
pursuant to this subsection (a) shall become effective retroactively immediately
after the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification.

(b) Adjustments for Issuances of Additional Stock. In case the Corporation
shall at any time or from time to time after August 1, 1995 issue any additional
shares of the Corporation's Common Stock ("Additional Common Stock"), for a
consideration per share either (I) less than the then current conversion price
immediately prior to the issuance of such Additional Common Stock, or (II)
without consideration, then (in the case of either clause (I) or (II)), and
thereafter successively upon each such issuance, the current conversion price
shall forthwith be reduced to a price equal to the price determined by
multiplying such current conversion price by a fraction, of which

(1) the numerator shall be

(i) the number of shares of the Corporation's Common Stock outstanding when
the then current conversion price became effective, plus

(ii) the number of shares of the Corporation's Common Stock which the
aggregate amount of consideration, if any, received by the Corporation upon all
issuances of the Corporation's Common Stock since the current conversion price
became effective (including the consideration, if any, received for such
Additional Common Stock) would purchase at the then current conversion price per
share, and

(2) the denominator shall be

(i) the number of shares of the Corporation's Common Stock outstanding when
the current conversion price became effective, plus

(ii) the number of shares of the Corporation's Common Stock issued since
the current conversion price became effective (including the number of shares of
such Additional Common Stock);

provided, however, that such adjustment results in a current conversion
price less than the current conversion price in effect immediately prior
to the issuance of such Additional Common Stock. The Corporation may, but

<PAGE> 44
shall not be required to, make any adjustment of the current conversion price
if the amount of such adjustment shall be less than one percent (1%) of the
current conversion price immediately prior to such adjustment, but any
adjustment that would otherwise be required then to be made which is not so
made shall be carried forward and shall be made at the time of (and together
with) the forward and shall be made at the time of (and together with) the next
subsequent adjustment which, together with any adjustments so carried forward,
shall amount to not less than one percent (1%) of the current conversion price
immediately prior to such adjustment.

(c) Certain Rules in Applying the Adjustment for Additional Stock
Issuances. For purposes of any adjustment as provided in Section 8(b) hereof,
the following provisions shall also be applicable:

(1) Cash Consideration. In case of the issuance of Additional Common
Stock for cash, the consideration received by the Corporation therefor
shall be deemed to be the cash proceeds received by the Corporation for
such Additional Common Stock after deducting any commissions or other
expenses paid or incurred by the Corporation for any underwriting of, or
otherwise in connection with the issuance of such Additional Common Stock.

(2) Non-Cash Consideration. In case of the issuance of Additional
Common Stock for a consideration other than cash, or a consideration a part
of which shall be other than cash, the amount of the consideration other
than cash so received or to be received by the Corporation shall be deemed
to be the value of such consideration at the time of its receipt by the
Corporation as determined in good faith by the Board of Directors, except
that where the non-cash consideration consists of the cancellation,
surrender or exchange of outstanding obligations of the Corporation (or
where such obligations are otherwise converted into shares of the
Corporations Common Stock), the value of the non-cash consideration shall
be deemed to be the principal amount of the obligations cancelled,
surrendered, satisfied, exchanged or converted. If the Corporation receives
consideration, part or all of which consists of publicly traded securities
(i.e., in lieu of cash), the value of such non-cash consideration shall be
the aggregate market value of such securities (based on the latest reported
sale price regular way) as of the close of the day immediately preceding
the date of their receipt by the Corporation.

<PAGE> 45
Corporation's Common Stock, if inclusion thereof in calculating adjustments
under this Section 8 would result in a current conversion price lower than if
excluded, the Corporation shall be deemed to have issued, for the consideration
described below, the number of shares of the Corporation's Common Stock into
which such convertible security may be converted when first convertible, or the
number of shares of the Corporation's Common Stock deliverable upon the exercise
of such rights, options or warrants when first exercisable, as the case may be
(and such shares shall be deemed to be Additional Common Stock for purposes of
Section (b) hereof). The consideration deemed to be received by the Corporation
at the time of the issuance of such convertible securities or such rights,
options or warrants shall be the consideration so received determined as
provided in Section 8(c)(1) and (2) hereof plus (x) any consideration or
adjustment payment to be received by the Corporation in connection with such
conversion or, as applicable, (y) the aggregate price at which shares of the
Corporation's Common Stock are to be delivered upon the exercise of such rights,
options or warrants when first exercisable (or, if no price is specified and
such shares are to be delivered at an option price related to the market value
of the subject Common Stock an aggregate option price bearing the same relation
to the market value of the subject Common Stock at the time such rights, options
or warrants were granted). If, subsequently, (1) such number of shares into
which such convertible security is convertible, or which are deliverable upon
the exercise of such rights, options or warrants, is increased or (2) the
conversion or exercise price of such convertible security, rights, options or
warrants is decreased, then the calculations under the preceding two sentences
(and any resulting adjustment to the current conversion price under Section 8(b)
hereof) with respect to such convertible security, rights, options or warrants,
as the case may be, shall be recalculated as of the time of such issuance but
giving effect to such changes (but any such recalculation shall not result in
the current conversion price being higher than that which would be calculated
without regard to such issuance). On the expiration or termination of such
rights, options or warrants, or rights to convert, the conversion price
hereunder shall be readjusted (up or down as the case may be) to such current
conversion price as would have been obtained had the adjustments made with
respect to the issuance of such rights, options, warrants or convertible
securities been made upon the basis of the delivery of only the number of shares
of the Corporation's Common Stock actually delivered upon the exercise of such
rights, options or warrants or upon the conversion of any such securities and
at the actual exercise or conversion prices (but any such recalculation shall
not result in the current conversion price being higher

<PAGE> 46
than that which would be calculated without regard to such issuance).

(4) Number of Shares Outstanding. The number of shares of
the Corporation's Common Stock as at the time outstanding shall exclude
all shares of the Corporation's Common Stock then owned or held by
or for the account of the Corporation but shall include the aggregate
number of shares of the Corporation's Common Stock at the time
deliverable in respect of the convertible securities, rights, options
and warrants referred to in Section 8(c)(3) hereof; provided, that
to the extent that such rights, options, warrants or conversion
privileges are not exercised, such shares of the Corporation's
Common Stock shall be deemed to be outstanding only until the
expiration dates of the rights, warrants, options or conversion
privileges or the prior cancellation thereof.

(d) Exclusion from the Adjustment for Additional Stock Issuances. No
adjustment of the current conversion price under Section 8(b) hereof shall
be made as a result of or in connection with the issuance of Common Shares
(i) upon conversion of the shares of Series A Preferred Stock or Series B
Preferred Stock (or the issuance of any shares of Series A Preferred Stock
or Series B Preferred Stock under any Purchase Agreement) or (ii) upon
exercise or conversion of the Warrants or the stock options granted to
employees of the Corporation on or before July 31, 1995.

(e) Accountants' Certification. Whenever the current
conversion price is adjusted as provided in this Section 8, the
Corporation will promptly obtain a certificate of a firm of
independent public accountants of recognized national standing
selected by the Board of Directors of the Corporation (who may be
the regular auditors of the Corporation) setting forth the
current conversion price as so adjusted, the computation of
such adjustment and a brief statement of the facts accounting for
such adjustment, and will mail to the holders of the shares of
Series A Preferred Stock a copy of such certificate from such firm
of independent public accountants.

(f) Antidilution Adjustments under other Securities.
Without limiting any other rights available hereunder to the holders
of shares of Series A Preferred Stock, if there is an antidilution
adjustment (x) under any security which is convertible into
Common Stock of the Corporation whether issued prior to or after
the date hereof (except for the shares of Series A Preferred Stock)
or (y) under any right, option or warrant to purchase Common
Stock of the Corporation whether issued prior to or after the date
hereof, which (in the case of clause (x) or (y)) results in a
reduction in the exercise or purchase price with respect to such
security, right, option or warrant to an amount less than the
then current conversion price or results in an increase in the
number of shares obtainable under such security, right, option or
warrant

<PAGE> 47
which has an effect equivalent to lowering a conversion or exercise price to an
amount less than the then current conversion price, then an adjustment shall be
made under this Section 8(f) to the then current conversion price hereunder. Any
such adjustment under this Section 8(f) shall be whichever of the following
results in a lower current conversion price:

(A) a reduction in the current conversion price equal to the
percentage reduction in such exercise or purchase price with respect to
such security, right, option or warrant, or

(B) a reduction in the current conversion price which will result in
the same percentage increase in the number of Common Shares available under
this Section 8 as the percentage increase in the number of shares
available under such security, right, option or warrant.

Any such adjustment under this Section 8(f) shall only be made if it would
result in a lower current conversion price than that which would be determined
pursuant to any other antidilution adjustment otherwise required under this
Section 8 as a result of the event or circumstance which triggered the
adjustment to the security, right, option or warrant described in clause (x) or
(y) above (and if any such adjustment is so made under this Section 8(f), then
such other antidilution adjustment otherwise required under this Section 8 shall
not be made as a result of such event or circumstance).

(g) Other Adjustments. In case any event shall occur as to which any of
the provisions of this Section 8 are not strictly applicable but the failure to
make any adjustment would not fairly protect the conversion rights represented
by the shares of Series A Preferred Stock in accordance with the essential
intent and principles of Sections 7 and 8 thereof, then, in each such case, the
Corporation shall appoint a firm of independent public accountants of recognized
national standing selected by the Board of Directors of the Corporation (who may
be the regular auditors of the Corporation), which shall give their opinion upon
the adjustment, if any, on a basis consistent with the essential intent and
principles established in Sections 7 and 8 hereof, necessary to preserve,
without dilution, the conversion rights represented by the shares of Series A
Preferred Stock. Upon receipt of such opinion, the Corporation will promptly
mail copies thereof to the holders of the shares of Series A Preferred Stock and
shall make the adjustments described therein.

(h) "Meaning of "Issuance". References in this Agreement to "issuances" of
stock by the Corporation include issuances by the Corporation of previously
unissued shares and issuances or other transfers by the Corporation of treasury
stock.

<PAGE> 48
(i) Consolidation or Merger. Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of
the Corporation's assets to another Person or other transaction which is
effected in such a way that holders of Common Stock are entitled to receive
(either directly or upon subsequent liquidation) stock, securities or assets
with respect to or in exchange for Common Stock is referred to herein as an
"Organic Change." Prior to the consummation of any Organic Change, the
Corporation shall make appropriate provision (in form and substance reasonably
satisfactory to holders of Series A Preferred Stock representing a majority of
the Series A Preferred Stock then outstanding) to insure that each of the
holders of the Series A Preferred Stock shall thereafter have the right to
acquire and receive in lieu of or in addition to (as the case may be) the
shares of Common Stock immediately therefore acquirable and receivable upon the
conversion of such holder's Series A Preferred Stock, such shares of stock,
securities or assets as may be issuable or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon conversion of such holder's Series A Preferred
Stock had such Organic Change not taken place.

In any such case, the Corporation shall make appropriate provision (in
form and substance reasonably satisfactory to the holders of Series A Preferred
Stock representing a majority of the Series A Preferred Stock then outstanding)
with respect to such holders' rights and interest to insure that the provision
hereof shall thereafter be applicable to the Series A Preferred Stock
(including, in the case of any such consolidation, merger or sale in which the
successor entity or purchasing entity is other than the Corporation, an
immediate adjustment of the conversion price to reflect the value for the Series
A Preferred Stock reflected by the terms of such consolidation, merger or sale,
if the value so reflected would cause an increase to the conversion price in
effect immediately prior to such consolidation, merger or sale). The Corporation
shall not effect any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor entity (if other than the Corporation)
resulting from such consolidation or merger or the Corporation purchasing such
assets assumes by written instrument (which may be the agreement of
consolidation, merger or sale), in form and substance reasonably satisfactory to
the holders of the Series A Preferred Stock representing a majority of the
Series A Preferred Stock then outstanding, the obligation to deliver to each
such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to acquire.

(j) Notices. In case at any time

(i) the Corporation shall take any action which would require an
adjustment in the current conversion price pursuant to Section 8(a) or
8(b); or

<PAGE> 49
(ii) there shall be any reorganization, reclassification or change of
the Corporation's Common Stock (other than a change in par value or from
par value to no par value or from no par value to par value), or any
consolidation or merger to which the Corporation is a party and for which
approval of any stockholders of the Corporation is required, or any sale,
transfer or lease of all or substantially all of the assets of the
Corporation; or

(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Corporation;

then, in any one or more of such cases, the Corporation shall give written
notice to the holders of the shares of Series A Preferred Stock, not less than
ten (10) days before any record date or other date set for definitive action, of
the date on which such action, distribution, reorganization, reclassification,
change, sale, transfer, lease, consolidation, merger, dissolution, liquidation
or winding-up shall take place, as the case may be. Such notice shall also set
forth such facts as shall indicate the effect of any such action (to the extent
such effect may be known at the date of such notice) on the current conversion
price and the kind and amount of the shares and other securities and property
deliverable upon conversion of the shares of Series A Preferred Stock. Such
notice shall also specify any date as of which the holders of the Common Stock
of record shall be entitled to exchange their Common Stock for securities or
other property deliverable upon any such reorganization, reclassification,
change, sale, transfer, lease, consolidation, merger, dissolution, liquidation
or winding-up, as the case may be.

9. Notices. Unless otherwise expressly specified or permitted by the
terms hereof, all notices, requests, demands, consents and other communications
hereunder shall be in writing and shall be delivered by hand or shall be sent by
telex or telecopy (confirmed by registered, certified or overnight mail or
courier, postage and delivery charges prepaid), to the following addresses:

(a) if to the holder of a share of Series A Preferred Stock, at the
holder's address as set forth in the stock register of the Corporation, or at
such other address as may have been furnished to the Corporation by the holder
in writing; or

(b) if to the Corporation, at SA Holdings, Inc., 1912 Avenue K, Suite 100,
Plano, TX 75074-5959 or at such other address as may have been furnished in
writing by the Corporation to the holders of the shares of Series A Preferred
Stock.

Whenever any notice is required to be given hereunder, such notice shall be
deemed given and such requirement satisfied only when such notice is delivered
or, if sent by telex or telecopier, when

<PAGE> 50
received, unless otherwise expressly specified or permitted by the terms hereof.

<PAGE> 51

IN WITNESS WHEREOF, SA Holdings, Inc. caused this Certificate
of Designations to be signed by its Chief Executive Officer this 31st
day of July, 1995.

SA HOLDINGS, INC.

By ________________________________
Jack W. Matz, Jr.
Chief Executive Officer

<PAGE> 1

EXHIBIT B

================================================================================

WARRANT PURCHASE AGREEMENT

DATED AS OF JULY 31, 1995

REGARDING
COMMON STOCK PURCHASE WARRANTS

SA HOLDINGS, INC.
A DELAWARE CORPORATION

================================================================================
<PAGE> 2
Warrant Purchase Agreement

WARRANT PURCHASE AGREEMENT dated as of July 31, 1995 by and
between SA Holdings, Inc., a Delaware corporation (the "Company"), and the
Purchaser listed on the signature page of this Agreement (the "Purchaser").

W I T N E S S E T H:

In consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

SECTION 1. SALE AND PURCHASE OF WARRANTS

(b) As used herein, "Warrants" means the aggregate of
Common Stock Purchase Warrants evidenced by certificates substantially in the
form of Exhibit A hereto, together with all Warrants issued in exchange
therefor or replacement thereof. Such Warrants in the aggregate initially
entitle the holders thereof to purchase 500,000 shares of the Company's common
stock, $.0001 par value per share, at a exercise price of $1.125 per share,
such number and such price being subject to adjustment as provided in the form
of Warrant attached hereto as Exhibit A.

SECTION 2. THE CLOSING

(a) Subject to the terms and conditions hereof, the
closing of the purchase and sale of the Warrants to be purchased by the
Purchaser (the "Closing") will take place at the offices of Arter, Hadden,
Johnson & Bromberg, Dallas, Texas, on July 31, 1995 or such other time and date
as shall be mutually agreed to by the Company and the Selling Shareholders for
the closing of the acquisition of the stock of US Communications, Inc., a Texas
corporation ("USC"), provided that the Closing shall occur no later than August
3, 1995. Such date and time are referred to herein as the "Closing Date.

(b) Subject to the terms and conditions hereof, on the
Closing Date (i) the Company will deliver to the Purchaser a Warrant or
Warrants evidenced by certificates substantially in the form of Exhibit A
hereto and dated the Closing Date, to purchase 500,000 shares of the Company's
Common Stock. The Warrants are being issued as partial payment of fees due from
the Company to the
<PAGE> 3
Warrant Purchase Agreement

Purchaser for services rendered in connection with the Company's acquisition of
USC.

SECTION 3. DEFINITIONS

(a) For purposes of this Agreement and the Warrants, the
following definitions shall apply (such definitions to be equally applicable to
both the singular and plural forms of the terms defined):

"Affiliate" means (a) any director, officer or employee of the
Company, (b) any Person who, individually or with his or her immediate
family or any other Affiliate, directly or indirectly, beneficially
owns or holds 5% or more of the voting interest in the Company, or (c)
any corporation, partnership or other Person in which any Person
described above owns a 5% or greater equity interest. Without
limiting the generality of the foregoing, Jack W. Matz, Jr. shall at
all times be deemed to be an Affiliate of the Company.

"Agreement" means this Agreement (together with exhibits and
schedules) as from time to time assigned, supplemented or amended or
as the terms hereof may be waived.

"Business Day" means any day, other than a Saturday, Sunday or
legal holiday, on which banks in the State of Texas are open for
business.

"Closing" has the meaning set forth in Section 2 hereof.

"Closing Date" has the meaning set forth in Section 2 hereof.

Commission" means the Securities and Exchange Commission and
any other similar or successor agency of the federal government
administering the Securities Act or the Securities Exchange Act.

"Common Stock" means that class of stock or other equivalent
evidences of ownership of a corporation, the holders of which are
entitled to vote generally to elect the Board of such corporation.
"Common Stock" includes without limitation the Common Stock, $.0001
par value per share, of the Company.

"Company" means SA Holdings, Inc., a Delaware corporation, its
successors and assigns.

"Loan Document" has the meaning provided in Section 4.1 hereof.

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<PAGE> 4
Warrant Purchase Agreement

"Outstanding" or "outstanding" means, when used with reference
to the Warrants as of a particular time, all Warrants as the case may
be, theretofore duly issued except (i) Warrants theretofore reported
as lost, stolen, mutilated or destroyed or surrendered for transfer,
exchange or replacement, in respect of which new or replacement
Warrants have been issued by the Company, and (ii) Warrants
theretofore fully exercised; except that for the purpose of
determining whether holders of the requisite principal amount of
Warrants have made or concurred in any declaration, waiver, consent,
approval, notice, annulment of acceleration or other communication
under this Agreement or under any Warrants, Warrants registered in the
name of, as well as Warrants owned beneficially by, the Company, any
Subsidiary or any of their Affiliates (other than the Purchaser) shall
not be deemed to be outstanding.

Person" or "person" means an individual, corporation,
company, partnership, firm, association, joint venture, trust,
unincorporated organization, government, governmental body, agency,
political subdivision or other entity.

"Preferred Stock" means any class of the capital stock of a
corporation (whether or not convertible into any other class of such
capital stock) which has any right, whether absolute or contingent, to
receive dividends or other distributions of the assets of such
corporation (including, without limitation, amounts payable in the
event of the voluntary or involuntary liquidation, dissolution or
winding-up of such corporation), which right is superior to the rights
of another class of the capital stock of such corporation. "Preferred
Stock" includes without limitation (i) the Series A Cumulative
Preferred Stock, $.00001 par value per share, of the Company and (ii)
the Series B Cumulative Preferred Stock, $.00001 par value per share,
of the Company.

"Public Offering" means an underwritten public offering of
equity securities of the Company.

"Purchaser" means the person who accepts and agrees to the
terms hereof as indicated by such person's signature (as "the
undersigned Purchaser") on the execution page of this Agreement,
together with successors and assigns.

"Rule 144" means (i) Rule 144 under the Securities Act as such
Rule is in effect from time to time, and (ii) any successor rule,
regulation or law, as in effect from time to time.

"Rule 144A" means (i) Rule 144A under the Securities Act as
such Rule is in effect from time to time and (ii) any

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<PAGE> 5
Warrant Purchase Agreement

successor rule, regulation or law, as in effect from time to time.

"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules, regulations and interpretations
thereunder.

"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and the rules, regulations and
interpretations thereunder.

"Senior Credit Agreement" means the Term Credit Agreement
between the Company and NorWest Bank Minnesota, National Association,
dated as of the date hereof.

"Senior Indebtedness" means the principal of, premium, if any,
and interest on Indebtedness of the Company under the Senior Credit
Agreement, and any renewals, modifications, refundings or extensions
of any such Indebtedness.

"Senior Lender" means Norwest Bank Minnesota, National
Association, its successors and assigns.

"Share" or "Shares" means shares of the Company's Common
Stock, or other securities which can be obtained or have been obtained
by an exercise in whole or in part of any Warrant or are obtained upon
an exchange of Shares pursuant to the terms of a Warrant or are
obtained upon an exchange of Shares pursuant to the terms of the
Company's articles of incorporation.

"Stock Purchase Agreement" means the Stock Purchase Agreement
by and among the Company, USC, Bill L. Johnson, Howard Maddera,
Marianne Reed and NTS Communications, Inc., dated as of June 30, 1995,
as amended.

"Subsidiary", with respect to any Person, means any
corporation, association or other entity of which more than 80% of the
total voting power of shares of stock or other equity interests
entitled (without regard to the occurrence of any contingency or any
pledge of shares) to vote in the election of directors, managers or
trustees thereof is, at the time as of which any determination is
being made, owned or controlled, directly or indirectly, by such
Person or one or more of its Subsidiaries, or both. The term
"Subsidiary" or "Subsidiaries" when used herein without reference to
any particular Person, means a Subsidiary or Subsidiaries of the
Company.

"USC" means US Communications, Inc., a Texas corporation.

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<PAGE> 6
Warrant Purchase Agreement

SECTION 4. REPRESENTATIONS AND WARRANTIES

The Company represents and warrants to the Purchaser as
follows:

4.1. Corporate Existence and Power.

The Company is a business corporation duly incorporated,
validly existing and in good standing under the laws of Delaware, and is duly
licensed or qualified to transact business in Texas and Delaware. The Company
has all requisite power and authority, corporate or otherwise, to conduct its
business, to own its properties and to execute and deliver, and to perform all
of its obligations under, the Agreement, the Warrants or any documents required
thereunder (hereinafter the "Loan Documents").

4.2. Authorization of Borrowing; No Conflict as to Law or
Agreements.

The execution, delivery and performance by the Company of the
Loan Documents have been duly authorized by all necessary corporate action of
the Company and do not and will not (i) require any consent or approval of the
shareholders of the Company, or any authorization, consent or approval by any
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, (ii) violate any provision of any law, rule or regulation
or of any order, writ, injunction or decree presently in effect having
applicability to the Company or of its Articles of Incorporation or Bylaws or
(iii) result in a breach of or constitute a default under any material
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Company is a party or by which it or its properties may
be bound or affected.

4.3. Legal Agreements.

The Loan Documents constitute the legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to the rights of creditors
generally.

4.4. Capitalization.

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<PAGE> 7
Warrant Purchase Agreement

the Company's Common Stock issuable upon exercise of the Warrants will, when
issued, be duly authorized, validly issued, fully paid and non-assessable.

SECTION 5. REPRESENTATIONS OF THE PURCHASER

(a) The Purchaser hereby makes the representations and
warranties to the Company contained in this Section 5(a), as of the date
hereof. The Purchaser has all requisite power, authority and legal right to
execute, deliver, enter into, consummate and perform this Purchase Agreement.
For purposes of the application of state securities laws, each Purchaser
represents that it is a resident of the state set forth in the Purchaser's
address on the signature page of this Agreement. The Purchaser has duly
executed and delivered this Purchase Agreement, and this Purchase Agreement
constitutes the legal, valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to the rights of creditors generally.

(b) The Purchaser hereby represents to the Company (as of the
date hereof and as of the Closing Date hereunder) that the Purchaser is capable
of evaluating the risk of its investment in the Warrants being purchased by it
and is able to bear the economic risk of such investment, that (except as the
Purchaser has otherwise advised the Company and the Purchaser's counsel in
writing) it is purchasing the Warrants to be purchased by it for its own
account, and that the Warrants are being purchased by the Purchaser for
investment and not with a present view to any distribution thereof in violation
of any applicable securities laws. It is understood that the disposition of
the Purchaser's property shall at all times be within the Purchaser's control.
If the Purchaser should in the future decide to dispose of any of its Warrants
or Shares, it is understood that it may do so but only in compliance with the
Securities Act and applicable securities laws. The Purchaser hereby represents
to the Company (as of the date hereof and as of the Closing Date hereunder)
that the Purchaser is an "accredited investor" as defined in Rule 501(a) under
the Securities Act.

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<PAGE> 8
Warrant Purchase Agreement

SECTION 6. AFFIRMATIVE COVENANTS OF THE COMPANY

So long as the Warrants shall remain outstanding, the Company
will comply with the following requirements, unless the Purchaser shall
otherwise consent in writing:

6.1. Reservation of Shares. There have been reserved, and
the Company shall at all times keep reserved, free from preemptive rights, out
of its authorized Common Stock, $.0001 par value per share, a number of shares
of Common Stock, $.0001 par value per share, sufficient to provide for the
exercise of the Warrants.

6.2. Listing of Shares. If any shares of the Company's
Common Stock are listed on any national securities exchange (or on the National
Association of Securities Dealers, Inc., Automated Quotation System or
comparable system), then the Company will take such action as may be necessary,
from time to time, to list Shares, as the case may be, on such exchange (or
system as the case may be).

6.3. Securities Exchange Act Registration. As soon as the
Company is either required to or does file a registration statement with
respect to the Company's Common Stock under Section 6 of the Securities Act or
Section 12(b) or Section 12(g), whichever is applicable, of the Securities
Exchange Act, then, thereafter:

(a) The Company will maintain effective a registration
statement (containing such information and documents as the Commission shall
specify and otherwise complying with the Securities Exchange Act) under Section
12(b) or Section 12(g), whichever is applicable, of the Securities Exchange
Act, with respect to the Company's Common Stock, as the case may be, and will
file on time such information, documents and reports as the Commission may
require or prescribe for companies whose stock has been registered pursuant to
such Section 12(b) or Section 12(g), whichever is applicable.

(b) The Company will, upon the request of any holder of
Shares, make whatever other filings with the Commission, or otherwise make
generally available to the public such financial and other information, as any
such holder may deem reasonably necessary or desirable in order to enable such
holder to be permitted to sell Shares pursuant to the provisions of Rule 144.

6.4. Private Placement Status. Neither the Company nor any
agent nor other Person acting on the Company's behalf will do or cause to be
done (or will omit to do or to cause to be done) any act which act (or which
omission) would result in bringing the issuance or sale of the Warrants within
the provisions of Section 5 of the Securities Act or the filing, notification
or reporting

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<PAGE> 9
Warrant Purchase Agreement

requirements of any state securities law (other than in accordance with a
registration and qualification of Shares pursuant to Section 10 hereof).

6.5. Delivery of Information. If a holder of Shares proposes
to transfer any such Shares pursuant to Rule 144A, the Company agrees to
provide (upon the request of such holder or the prospective transferee) to such
holder and (if requested) to the prospective transferee any information
concerning the Company and its Subsidiaries which is required to be delivered
to any transferee of such Shares pursuant to such Rule 144A.

6.6. Financial Reports. The Company will deliver to the
Purchaser:

SECTION 7. CONDITIONS TO PURCHASER'S OBLIGATIONS

The Purchaser's obligation to purchase the Warrants hereunder
is subject to satisfaction of the following conditions at the Closing (any of
which may be waived by the Purchaser):

7.1. Intentionally Omitted.

7.2. Accuracy of Representations and Warranties. The
representation and warranties of the Company herein or in any certificates or
document delivered pursuant hereto shall be correct and complete on and as of
the Closing Date with the same effect as though made on and as of the Closing
Date (after giving effect to the transactions contemplated by this Agreement).

7.3. Proceedings. All corporate and other proceedings in
connection with the transactions contemplated by the Warrants and all documents
incident thereto, shall be in form and substance satisfactory to the Purchaser
and its counsel, and the Purchaser shall have received all such originals or
certified or other copies of such documents as the Purchaser or its counsel may
reasonably request.

7.4. Acquisition. The Company and the Senior Lender shall
have executed and delivered the Senior Credit Agreement,

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<PAGE> 10
Warrant Purchase Agreement

which shall be in full force and effect and the Company shall have made a
borrowing thereunder sufficient, together with proceeds from the sale of Series
A Convertible Preferred Stock, Series B Convertible Preferred Stock and the
Subordinated Notes of the Company issued on the date hereof to close under the
terms of the Stock Purchase Agreement.

SECTION 8. AMENDMENT; WAIVER; CONSENT

(a) This Agreement and the Warrants may be amended (or
any provision hereof or thereof waived) only with the written consent of the
holders of a majority in interest of the Warrants.

(b) The Company agrees that all holders of Warrants shall
be notified by the Company in advance of any proposed amendment or waiver, but
failure to give such notice shall not in any way affect the validity of any
such amendment or waiver. In addition, promptly after obtaining the written
consent of the holders herein provided, the Company shall transmit a copy of
any amendment or waiver which has been adopted to all holders of Warrants then
outstanding, but failure to transmit copies shall not in any way affect the
validity of any such amendment or waiver.

(c) The Company and each holder of Warrants then or
thereafter outstanding shall be bound by any amendment or waiver effected in
accordance with the provisions of this Section 10.

(d) Any provision of this Agreement relating to the
consent, determination, decision or waiver of a holder or holders of Warrants
such holder's consent, determination, decision or waiver, as the case may be,
in such holder's sole discretion.

SECTION 9. RESTRICTIONS ON TRANSFER

(a) Each holder of a Warrant by acceptance thereof agrees
that it will not sell or otherwise dispose of any Warrants or Shares unless (i)
such Warrants or Shares have been registered under the Securities Act and, to
the extent required, under any applicable state securities laws, or (ii) such
Warrants or Shares are sold in accordance with the applicable requirements and
limitations of Rule 144 or Rule 144A and any applicable state securities laws
or (iii) the Company has been furnished with an opinion or opinions from
counsel to such holder (which counsel and opinion(s) shall be reasonably
satisfactory to the Company and which counsel may be inside counsel of such
holder) to the effect that registration under the Securities Act is not
required for the transfer as proposed (which opinion may be conditioned upon
the transferee's assuming the obligations of a holder of Warrants or Shares
under this Section) or (iv) the Company has been furnished with a letter from
the Division of Corporate Finance of the

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<PAGE> 11
Warrant Purchase Agreement

Commission to the effect that such Division would not recommend any action to
the Commission if such proposed transfer were effected without a registration
statement effective under the Securities Act. The Company agrees that within
five (5) Business Days after receipt of any opinion referred to in (iii) above,
it will notify the holder supplying such opinion whether such opinion is
satisfactory to the Company's counsel.

(b) The Company may endorse on all Warrant certificates
and Share certificates a legend stating or referring to the transfer
restrictions contained in paragraph (a) above; provided, that no such legend
shall be endorsed on any Warrant or Share certificates which, when issued, are
no longer subject to the restrictions of this Section 9; provided, further,
that if a transfer is made pursuant to clause (i), (ii) (other than pursuant to
Rule 144A) or (iv) of paragraph (a) or if an opinion of counsel provided
pursuant to clause (iii) of paragraph (a) concludes that the legend is no
longer necessary, the Company will deliver upon transfer Warrant certificates
or Share certificates, as the case may be, without such legends.

SECTION 10. REGISTRATION RIGHTS

10.1. Registration at the Request of Holders.

The Company agrees that on or after July 31, 1996,
upon receipt by the Company of a Registration Demand satisfying the conditions
under Section 10.1(b) hereof, the Company will (A) promptly (at least thirty
(30) days prior to the filing date) give written notice of the proposed
registration to each holder of a Note or Share, and (B) with reasonable
promptness, and in any case not later than ninety (90) days after receipt by
the Company of the Registration Demand, use reasonable efforts to file as soon
as practicable a registration statement with the Commission relating to the
Shares as to which registration is requested in the Registration Demand. The
Company shall use its reasonable best efforts to make such registration
statement become effective and to qualify the same under the Blue Sky laws of
such states as may be requested; provided, however, that with respect to
compliance with Blue Sky laws, the Company shall not be obligated to qualify as
a foreign corporation or to execute or file any general consent to service of
process under the laws of any such state where it is not so subject. The
Company shall also include under such registration statement (and in such state
qualifications) any Shares requested to be so included by any other holder of
Notes or Shares by written notice delivered to the Company within thirty (30)
days after the sending of the notice provided for in (A) above.

(a) A "Registration Demand" means a written notice from
one or more holders of Notes or Shares stating that such holder or holders
desire to sell all of their Shares under circumstances

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<PAGE> 12
Warrant Purchase Agreement

requiring registration under the Securities Act and requesting that the Company
effect registration with respect to all of the Shares held, or to be held after
conversion of Notes, by such holder or holders; provided, that such holder or
holders giving such notice hold Notes or Shares representing, or entitling the
holder thereof to obtain upon conversion, in the aggregate not less than
150,000 Shares (as such number may be adjusted from time to time hereafter as a
result of a stock split, combination, etc.).

(b) The Company is obligated to effect registration and
qualification pursuant to this Section 10.1 no more than two times.

(c) If the holder or holders who gave the Registration
Demand under this Section 10.1 inform the Company by written notice that they
are withdrawing their Registration Demand and pay all of the Company's
out-of-pocket expenses with respect to such registration and qualification
incurred to the date of the notice under this Section 10.1(d), then the
registration statement need not be filed and the whole effort will not count as
a registration and qualification (or an exercise of rights) under this Section
10.1.

(d) The Company may, upon written notice to the holder or
holders giving a Registration Demand, require such holder or holders to
withdraw such Registration Demand upon the good faith determination by the
Company that such postponement is necessary (i) to avoid disclosure of
non-public information or (ii) as a result of a pending financial transaction,
and in each case, the holders may not give another Registration Demand for a
period of up to ninety (90) days, as specified by the Company in such notice;
provided that the Company may exercise this right not more than once in any
12-month period. The Company may only give such a notice where the giving of
such a notice has been specifically approved by the Company's Board of
Directors. Upon receipt of any such written notice from the Company, such
Registration Demand shall be deemed to be rescinded and retracted (subject to
being given again after any holdback period specified in such notice in
accordance with the second preceding sentence) and shall not be counted as, or
deemed or considered to be or to have been, a Registration Demand for any
purpose.

10.2. Piggyback Rights.

- 11 -
<PAGE> 13
Warrant Purchase Agreement

than thirty (30) days before its filing with the Commission to all holders of
Warrants or Shares; provided, that registrations relating solely to securities
to be issued by the Company in connection with any employee stock option or
employee stock purchase or savings plan on Form S-8 (or successor forms) or
Form S-4 (or successor forms) under the Securities Act shall not be subject to
this Section 10.2. If holders of Warrants or Shares so request within thirty
(30) days, the Company shall include in any such registration the Shares held
or to be held after exercise of Warrants by such holders and requested to be
included in such registration, subject to Section 10.2(b) hereof.

(b) The Company shall not be obligated to so include the
Shares to the extent any underwriter or underwriters of such securities being
otherwise registered by the Company determines in good faith that the inclusion
of such Shares would jeopardize the successful sale of such other securities
proposed to be sold by such underwriter or underwriters, in which case holders
of Warrants or Shares desiring to participate in such registration shall be
entitled to participate in any such reduced number of Shares (if any) which may
be included in such registration (along with other holders of Common Stock
exercising piggyback rights with respect to such registration) in proportion to
the amount of shares of the Company's Common Stock held by such holders
(whether held directly or through the right to obtain Shares upon exercise of
Warrants held by such holders).

(c) The obligations and rights of the Company and the
holders under this Section 10.2 shall not affect in any way their obligations
and rights under Section 10.1 hereof.

(d) The Company may propose including Common Stock to be
publicly offered and sold by it in any registration statement to be filed
pursuant to a Registration Demand under Section 10.1. If, in the written
opinion of underwriters selected for the proposed offering, the inclusion of
the securities proposed to be offered and sold by both the Company and the
holders of Notes or Shares would jeopardize the success of the offering, the
selling holders may elect (i) to exclude the amount of securities (up to all of
the securities) proposed to be sold by the Company which, in the opinion of
such underwriters, would jeopardize the success of the offering by the selling
holders, or (ii) to convert their proposed offering to an offering pursuant to
this Section 10.2. If the selling holders elect to convert the offering to one
under this Section 10.2, then such registration shall not be deemed (or counted
as) a registration and qualification (or an exercise of rights) under Section
10.1 hereof.

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<PAGE> 14
Warrant Purchase Agreement

10.3. Expenses.

Subject to the limitations contained in this Section 10.3 and
except as otherwise specifically provided in this Section 10, the entire costs
and expenses of registration and qualification pursuant to Section 10.1 hereof
and of registration and qualification pursuant to Section 10.2 hereof shall be
borne by the Company. Such costs and expenses shall include, without
limitation, underwriting fees or commissions in connection with the
registration and qualification pursuant to Section 10.1 hereof (other than with
respect to the Shares to be sold by the holders of Warrants or Shares, as to
which underwriting discounts and commissions shall be paid by the selling
holders), the fees and expenses of counsel for the Company and of its
accountants, all other costs, fees and expenses of the Company incident to the
preparation, printing, registration and filing under the Securities Act of the
registration statement and all amendments and supplements thereto, up to
$20,000 of reasonable fees and expenses of one counsel to the holders of
Warrants or Shares relating to such registration and qualification, the cost of
furnishing copies of each preliminary prospectus, each final prospectus and
each amendment or supplement thereto to underwriters, dealers and other
purchasers of the Shares and the costs and expenses (including reasonable fees
and disbursements of counsel) incurred in connection with the qualification of
the Shares under the Blue Sky laws of various jurisdictions; provided, however,
that if any jurisdiction in which the Company shall qualify or register in
connection with the proposed sale of the Shares shall require that expenses
incurred in connection with the qualification or registration of such Shares in
that jurisdiction be borne in whole or in part by the holders selling those
Shares, then such expenses shall be payable by such holders pro rata to the
extent required by such jurisdiction and in the event that any such holder is
required by any such applicable jurisdiction to bear such expense, the Company
shall promptly reimburse each such holder for the amount paid therefor.

10.4. Procedures.

(a) In the case of each registration or qualification
pursuant to Section 10.1 or 10.2, the Company will keep all holders of Warrants
or Shares advised in writing as to the initiation of proceedings for such
registration and qualification and as to the completion thereof, and will
advise any such holder, upon request, of the progress of such proceedings.

(b) At the Company's expense, the Company will keep each
registration and qualification under this Section 10 effective (and in
compliance with the Securities Act) by such action as may be necessary or
appropriate for a period of one hundred twenty (120) days after the effective
date of such registration statement, including, without limitation, the filing
of post-effective

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<PAGE> 15
Warrant Purchase Agreement

amendments and supplements to any registration statement or prospectus
necessary to keep the registration statement current and the further
qualification under any applicable Blue Sky or other state securities laws to
permit such sale or distribution, all as requested by such holder or holders.

(c) The Company will immediately notify each holder on
whose behalf Shares have been registered pursuant to this Section 10, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration-statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing.

(d) The Company will furnish to each holder on whose
behalf Shares have been registered pursuant to this Section 10 a signed
counterpart, addressed to such holder, of an opinion of counsel for the
Company, dated the effective date of such registration statement.

(e) Without limiting any other provision hereof, in
connection with any registration of Shares under this Section 10, the Company
will use its reasonable best efforts to comply with the Securities Act, the
Securities Exchange Act and all applicable rules and regulations of the
Commission, and will make generally available to its securities holders, as
soon as reasonably practicable, an earnings statement covering a period of at
least twelve (12) months, beginning with the first month of the first fiscal
quarter after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act.

(f) In connection with any registration of Shares under
this Section 10, the Company will provide a transfer agent and registrar for
the Shares not later than the effective date of such registration statement.

(g) The Company shall not be required to include any of
the holders' Shares in an underwritten offering of the Company's securities
unless such holders accept the terms of the underwriting as agreed upon between
the Company and the underwriters selected by it, which terms shall include
customary provisions with respect to indemnification and contribution and
customary representations and warranties by the Company (which shall be made to
and for the benefit of the underwriters and the holders of Shares to be sold in
such offering).

(h) In connection with the preparation and filing of each
registration statement registering Shares under this Section 10, the Company
will give the holders of Notes or Shares on

- 14 -
<PAGE> 16
Warrant Purchase Agreement

whose behalf such Shares are to be so registered and their underwriters, if
any, and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records and such opportunities to discuss the business of the Company with its
officers, its counsel and the independent public accountants who have certified
its financial statements, as shall be reasonably necessary, in the reasonable
opinion of such holders or such underwriters or their counsel, in order to
conduct a reasonable and diligent investigation within the meaning of the
Securities Act.

10.5. Indemnification.

The Company will indemnify and hold harmless each holder of
Warrants or Shares and any underwriter (as defined in the Securities Act) for
such holder and each person, if any, who controls the holder or underwriter
within the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, and expenses (including reasonable attorneys'
fees and expenses and reasonable costs of investigation) to which the holder or
underwriter or such controlling person may be subject, under the Securities Act
or otherwise, insofar as any thereof arise out of or are based upon (a) any
untrue statement or alleged untrue statement of a material fact contained in
(i) any registration statement under which such Shares were registered under
the Securities Act pursuant to Section 10.1 or 10.2 hereof, any prospectus or
preliminary prospectus contained therein, or any amendment or supplement
thereto, or (ii) any other document incident to the registration of the Shares
under the Securities Act or the qualification of the Shares under any state
securities laws applicable to the Company, or (b) the omission or alleged
omission to state in any item referred to in the preceding clause (a) a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (c) any violation or alleged violation by the Company
of the Securities Act, the Securities Exchange Act or any other federal or
state securities law, rule or regulation applicable to the Company and relating
to action or inaction by the Company in connection with any such registration
or qualification, except insofar as such losses, claims, damages, liabilities
or expenses arise out of or are based upon any untrue statement or alleged
untrue statement or omission or alleged omission based upon information
furnished to the Company in writing by such holder or by any underwriter for
such holder expressly for use therein (with respect to which information such
holder or underwriter shall so indemnify and hold harmless the Company, any
underwriter for the Company and each person, if any, who controls the Company
or such underwriter within the meaning of the Securities Act).

- 15 -
<PAGE> 17
Warrant Purchase Agreement

10.6. Holdback.

Except for transfers made in transactions exempt from the
registration requirements under the Securities Act pursuant to Section 4(2)
thereof or pursuant to Rule 144A, the Company and each holder of Warrants or
Shares agrees not to offer, sell, contract to sell or otherwise dispose of any
of their respective shares of the Company's Common Stock within seven (7) days
before or one hundred eighty (180) days after the date of any final prospectus
relating to any underwritten public offering of the Company's Common Stock on
behalf of the Company or otherwise, in each case except pursuant to such
prospectus or with the written consent of underwriters for such offering.

SECTION 11. NOTICES

Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, elections, demands, consents and other
communications hereunder or with respect to any Warrant shall be in writing and
shall be delivered by hand or shall be sent by telecopy (and if sent by
telecopy, shall be confirmed by registered mail, return receipt requested, or
by overnight mail or courier, postage and delivery charges prepaid), to the
following addresses:

(a) if to the Purchaser, at the Purchaser's address as
set forth in Exhibit A hereto, or at such other address as may be furnished to
the Company by the Purchaser in writing; or

(b) if to any other holder of a Warrant, at such address
as the payee or registered holder thereof shall have designated to the Company
in writing; or

(c) if to the Company, 1912 Avenue K, Suite 100, Plano,
Texas 75074-5959, attention: Chief Executive Officer, or at such other address
as may be furnished in writing by the Company to the Purchaser and to the other
holders of Warrants.

Whenever any notice is required to be given hereunder, such notice shall be
deemed given and such requirement satisfied only when such notice is delivered
or, if sent by telecopier, when received. Addresses may be changed upon notice
of such change given as provided in this Section 11.

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<PAGE> 18
Warrant Purchase Agreement

SECTION 12. MISCELLANEOUS

12.1. Entire Agreement.

The Purchase Agreements and, upon the closing hereunder, the
Warrants issued hereunder, together with any further agreements entered into by
the Purchaser and the Company at the closing hereunder, contain the entire
agreement among the Purchaser and the Company, and supersede any prior oral or
written agreements, commitments, terms or understandings, regarding the subject
matter hereof.

12.2. Survival.

All agreements, representations and warranties contained in
this Agreement, the Warrants, or any document or certificate delivered pursuant
hereto or thereto shall survive, and shall continue in effect following, the
execution and delivery of this Agreement, the closings hereunder and
thereunder, any investigation at any time made by the Purchaser or on its
behalf or by any other Person, the issuance, sale and delivery of the Warrants
and any disposition thereof.

12.3. Counterparts.

This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one counterpart.

12.4. Headings.

The headings and captions in this Agreement and the table of
contents are for convenience of reference only and shall not define, limit or
otherwise affect any of the terms or provisions hereof.

12.5. Binding Effect, Benefit and Assignment.

(a) The terms of this Agreement shall be binding upon,
and inure to the benefit of, the parties and their respective successors and
permitted assigns whether so expressed or not.

(b) The Company may not assign any of its obligations,
duties or rights under this Agreement, or under the Warrants issued hereunder,
except with the Purchaser's consent.

(c) In addition to any assignment by operation of law,
the Purchaser may assign, in whole or in part, any or all of its rights (and/or
obligations) under this Agreement or under the Warrants to any permitted
transferee of any or all of its Warrants

- 17 -
<PAGE> 19
Warrant Purchase Agreement

or Shares, and (unless such assignment expressly provides otherwise) any such
assignment shall not diminish the rights the Purchaser would otherwise have
under this Agreement or with respect to any remaining Warrants or Shares held
by the Purchaser or with respect to any indemnity or reimbursement rights (or
with respect to any other provisions which expressly provide that they survive
any termination of this Agreement).

12.6. Severability.

Any provision hereof or of the Warrants which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law
which may render any provision hereof prohibited or unenforceable in any
respect.

12.7. Governing Law.

This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (other than any conflict of
laws rules which might result in the application of the laws of any other
jurisdiction).

12.8. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH
PARTY CONSENTS TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS
LOCATED IN THE STATE OF TEXAS IN CONNECTION WITH ANY CONTROVERSY RELATED TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, WAIVES ANY ARGUMENT THAT VENUE IN
ANY SUCH FORUM IS NOT CONVENIENT, AND AGREES THAT ANY LITIGATION INITIATED BY
ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL
BE VENUED IN EITHER THE DISTRICT COURT OF DALLAS COUNTY, TEXAS, OR THE UNITED
STATES DISTRICT COURT, NORTHERN DISTRICT OF TEXAS.

12.9. WAIVER OF JURY TRIAL. THE COMPANY AND THE PURCHASER
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

- 18 -
<PAGE> 20
Warrant Purchase Agreement

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.

SA HOLDINGS, INC.

By: /s/ Jack Matz
----------------------------------
Name: Jack Matz
Title: Chief Executive Officer

Address in Accepted and agreed to as of the date
State of first above written by the
Residence: undersigned Purchaser:
650 Fifth Ave.
New York, NY 10019
JESUP & LAMONT CAPITAL MARKETS, INC.

By: /s/ Howard F. Curd
----------------------------------
Name: Howard F. Curd
Title: Executive Vice President

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<PAGE> 21
Warrant Purchase Agreement

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. SALE AND PURCHASE OF WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 2. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SECTION 3. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1. Corporate Existence and Power. . . . . . . . . . . . . . . . . . . . . . 5
4.2. Authorization of Borrowing; No Conflict
as to Law or Agreements. . . . . . . . . . . . . . . . . . . . . . . . . 5
4.3. Legal Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.4. Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

SECTION 5. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . 6

SECTION 6. AFFIRMATIVE COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 7
6.1. Reservation of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.2. Listing of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.3. Securities Exchange Act Registration . . . . . . . . . . . . . . . . . . 7
6.4. Private Placement Status . . . . . . . . . . . . . . . . . . . . . . . . 7
6.5. Delivery of Information . . . . . . . . . . . . . . . . . . . . . . . . . 8

SECTION 7. CONDITIONS TO PURCHASER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . 8
7.1. Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.2. Accuracy of Representations and Warranties. . . . . . . . . . . . . . . . 8
7.3. Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.4. Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

SECTION 8. AMENDMENT; WAIVER; CONSENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SECTION 9. RESTRICTIONS ON TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

SECTION 10. REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10.1. Registration at the Request of Holders . . . . . . . . . . . . . . . . . 10
10.2. Piggyback Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
10.3. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.4. Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10.5. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10.6. Holdback. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 11. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

SECTION 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.1. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.2. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>

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<PAGE> 22
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
12.3. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.4. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.5. Binding Effect, Benefit and Assignment . . . . . . . . . . . . . . . . . 17
12.6. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.7. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.8. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. . . . . . . . . . . . . 18
12.9. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>

EXHIBITS

Exhibit A - Form of Warrant Certificate

- ii -

<PAGE> 1
Exhibit C

THIS WARRANT CERTIFICATE (AND THE COMMON STOCK OR OTHER SECURITIES ISSUABLE
UPON EXERCISE HEREOF) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR UNDER ANY APPLICABLE LAW OR REGULATION OF ANY STATE AND ARE NOT TRANSFERABLE
EXCEPT UPON THE CONDITIONS SPECIFIED IN SECTION 9 OF THE PURCHASE AGREEMENT
REFERRED TO HEREIN.

SA HOLDINGS, INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE

Dated July 31, 1995
New York, New York

FOR VALUE RECEIVED, the undersigned, SA HOLDINGS, INC., a
Delaware corporation (herein referred to as the "Company"), hereby certifies
and agrees that JESUP & LAMONT CAPITAL MARKETS, INC., or its registered
assigns, is entitled to purchase from the Company up to an aggregate of 500,000
duly authorized, validly issued, fully paid and non-assessable shares of the
Company's Common Stock, or any stock into which such Common Stock shall have
been changed or converted or any stock or other securities resulting from a
reclassification thereof (the "Shares") at a purchase price per Share of $1.125
at any time and from time to time from the date hereof until the Expiration
Date (as hereinafter defined). The foregoing agreement and rights are all
subject to the terms, conditions and adjustments (in both the number of Shares
and the purchase price per Share) set forth below in this Warrant Certificate.

This Warrant Certificate is one of the Common Stock Purchase
Warrant Certificates (the "Warrants", which term includes all Warrants issued
in substitution therefor) originally issued pursuant to the Warrant Purchase
Agreement dated as of July 31, 1995 (the "Purchase Agreement") between the
Company and Jesup & Lamont Capital Markets, Inc. The Warrants originally so
issued evidence rights to purchase an aggregate of 500,000 Shares at an
exercise price of $1.125 per share, subject to adjustment as provided herein.
This Warrant is subject to the provisions, and is entitled to the benefits, of
the Purchase Agreement.

SECTION 1. EXERCISE OF WARRANT.

1.1. SURRENDER, SUBSCRIPTION AND PAYMENT. This Warrant may
be exercised by the holder hereof, in whole or in part, at any time from the
date hereof until the close of business on the

<PAGE> 2
Expiration Date, during normal business hours on any Business Day (as defined
in the Purchase Agreement), by surrender of this Warrant, together with the
form of subscription attached as Annex A hereto (or a reasonable facsimile
thereof) duly executed by such holder in substantially such form, to the
Company at its office designated pursuant to Section 17 of the Purchase
Agreement (or, if such exercise is in connection with an underwritten public
offering of Shares subject to this Warrant or of securities into which Shares
subject to this Warrant may be converted, at the location at which the
underwriting agreement requires that such Shares be delivered). Payment of the
exercise price for the Shares specified in such subscription shall be made, at
the option of the holder, (a) by certified or official bank check (or wire
transfer) payable to the order of the Company in federal or other immediately
available funds in an amount equal to (i) the number of Shares specified in
such form of subscription, multiplied by (ii) the then current exercise price
(as hereinafter defined), or (b) by conversion of this Warrant, or any portion
hereof, in the manner provided in Section 1.6 hereof. Such holder shall
thereupon be entitled to receive the number of Shares specified in such form of
subscription (plus cash in lieu of any fractional share as provided in Section
1.4 hereof).

1.2. EFFECTIVE DATE. Each exercise of this Warrant pursuant
to Section 1.1 hereof shall be deemed to have been effected immediately prior
to the close of business on the Business Day on which this Warrant shall have
been surrendered to the Company as provided in Section 1.1 hereof (except that
if such exercise is in connection with an underwritten public offering of
Shares subject to this Warrant or of securities into which Shares subject to
this Warrant may be converted, then such exercise shall be deemed to have been
effected upon such surrender of this Warrant), and such exercise shall be at
the current exercise price in effect at such time. On each such day that an
exercise of this Warrant is deemed effected, the person or persons in whose
name or names any certificate or certificates for Shares are issuable upon such
exercise, as provided in Section 1.4 hereof, shall be deemed to have become the
holder or holders of record thereof.

1.3. EXPIRATION DATE. This Warrant will expire, and
thereafter will not be exercisable, at the close of business on July 31, 1998
(the "Expiration Date").

1.4. SHARE CERTIFICATES, CASH FOR FRACTIONAL SHARES AND
REISSUANCE OF WARRANTS. As promptly as practicable after the exercise of this
Warrant, in whole or in part, and in any event within five (5) Business Days
thereafter (unless such exercise is in connection with a public offering of
Shares subject to this

- 2 -
<PAGE> 3
Warrant or of securities into which Shares subject to this Warrant may be
converted, in which event concurrently with such exercise), the Company at its
expense (including the payment by it of any applicable issue, stamp or other
taxes other than any income taxes) will cause to be issued in the name of and
delivered to the holder hereof or, subject to Section 14 of the Purchase
Agreement, as such holder may direct:

(i) a certificate or certificates for the number of Shares to
which such holder shall be entitled upon such exercise plus, in lieu
of any fractional share to which such holder would otherwise be
entitled, cash in an amount equal to the same fraction of the Market
Price per Share (determined in accordance with Section 1.6(b) hereof)
on the effective date of such exercise; and

(ii) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, calling in the aggregate on the face or faces
thereof for the number of Shares (without giving effect to any
adjustment therein) equal to the number of such Shares called for on
the face of this Warrant minus the number of Shares which could have
been obtained upon such exercise for the exercise price paid if the
current exercise price had been $1.125 per Share.

1.5. ACKNOWLEDGMENT OF OBLIGATION. The Company will, at the
time of or at any time after each exercise of this Warrant, upon the request of
the holder hereof or of any Shares issued upon such exercise, acknowledge in
writing its continuing obligation to afford to such holder all rights
(including, without limitation, any rights to registration of any such Shares
pursuant to the Purchase Agreement) to which such holder shall continue to be
entitled under this Warrant, the Purchase Agreement, and the Notes; provided,
that if any such holder shall fail to make any such request, the failure shall
not affect the continuing obligation of the Company to afford such rights to
such holder.

1.6. CONVERSION OF WARRANT. (a) In addition to and without
limiting the rights of the holder under the terms of this Warrant, the holder
of this Warrant shall have the option, but not the obligation, to convert this
Warrant, or any portion hereof (the "Conversion Right"), into Shares as
provided in this Section 1.6 at any time on or prior to the Expiration Date.
Upon exercise of the Conversion Right with respect to a particular number of
shares subject to this Warrant (the "Converted Warrant Shares"), the Company
shall deliver to the holder (without payment by the holder of any exercise
price or any cash or other consideration) that number of Shares equal to the
quotient obtained by dividing (i) the

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<PAGE> 4
value of this Warrant (or the specified portion hereof) on the effective date
of the exercise of the Conversion Right, as provided in Section 1.2 hereof (the
"Conversion Date"), which value shall be determined by subtracting (x) the
aggregate exercise price of the Converted Warrant Shares immediately prior to
the exercise of the Conversion Right from (y) the aggregate Market Price of
such Converted Warrant Shares on the Conversion Date by (ii) the Market Price
of one Share on the Conversion Date.

(b) Determination of Market Price. For purposes of this
Warrant, "Market Price" of the Company's Shares shall mean:

(i) if traded on a stock exchange, the Market Price of the
Company's Shares shall be deemed to be the average of the daily closing selling
prices of the Shares on the stock exchange reasonably determined by the
Company's Board of Directors to be the primary market for the Shares over the
ten (10) trading day period ending on the date prior to the effective date of
the exercise or conversion of this Warrant, as such prices are officially
quoted in the composite tape of transactions on such exchange;

(ii) if traded over-the-counter, the Market Price of the
Shares shall be deemed to be the average of the daily closing selling prices
(or, if such information is not available, the average of the daily closing bid
and asked prices) of the Shares over the ten (10) trading day period ending on
the date prior to the effective date of the exercise or conversion of this
Warrant, as such prices are reported by the National Association of Securities
Dealers through its NASDAQ system or any successor system; and

(iii) if there is no public market for the Shares, then the
Market Price shall be determined by mutual agreement of the holder of the
Warrant and the Company, and if the holder and the Company are unable to so
agree within twenty (20) days after the event giving rise to the need to
determine the Market Price, by an investment banker of national reputation
selected by mutual agreement of the Company and the holder of the Warrant.

SECTION 2. EXERCISE PRICE AND ADJUSTMENTS.

2.1. CURRENT EXERCISE PRICE. The term "exercise price",
shall mean initially $1.125 per Share, subject to adjustment. For purposes of
this Section 2.1, the exercise price of $1.125 shall be deemed to have become
effective at the close of business on the date hereof but shall be subject to
adjustment as set forth in Sections 2.2 and 2.3 hereof. The term "current
exercise price" as used herein shall mean the exercise price, as the same may
be

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<PAGE> 5
adjusted from time to time as hereinafter provided, in effect at any given
time. In determining the current exercise price, the result shall be expressed
to the nearest $0.01, but any such lesser amount shall be carried forward and
shall be considered at the time of and together with the next subsequent
adjustment which, together with any adjustments to be carried forward, shall
amount to $0.01 per Share or more.

2.2. ADJUSTMENT OF EXERCISE PRICE.

The exercise price shall be adjusted, from time
to time, as follows:

(a) Adjustments for Stock Dividends, Recapitalizations,
Etc. In case the Corporation shall, after August 1, 1995, (w) pay a stock
dividend or make a distribution (on or in respect of its Common Stock) in
shares of its Common Stock (except there shall be no adjustment with respect to
the payment by the Company of a stock dividend to holders of its Common Stock
of the shares of Strategic Abstract & Title Corporation, a Texas corporation),
(x) subdivide its outstanding shares of Common Stock, (y) combine its
outstanding shares of Common Stock into a smaller number of shares, or (z)
issue by reclassification of its shares of Common Stock, any shares of capital
stock of the Corporation, then, in any such case, the current exercise price in
effect immediately prior to such action shall be adjusted to a price such that
if the holder of a Warrant were to exercise such Warrant in full immediately
after such action, such holder would be entitled to receive the number of
shares of capital stock of the Corporation which such holder would have owned
immediately following such action had such Warrant been exercised immediately
prior thereto (with any record date requirement being deemed to have been
satisfied), and, in any such case, such exercise price shall thereafter be
subject to further adjustments under this Section 2.2. An adjustment made
pursuant to this subsection (a) shall become effective retroactively on the
record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification.

(b) Adjustments for Issuances of Additional Stock. In
case the Corporation shall at any time or from time to time after August 1,
1995 issue any additional shares of the Corporation's Common Stock ("Additional
Common Stock"), for a consideration per share either (I) less than the then
current exercise price immediately prior to the issuance of such Additional
Common Stock, or (II) without consideration, then (in the case of either clause
(I) or (II)), and thereafter successively upon each such issuance, the current
exercise price shall forthwith be reduced to a price

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<PAGE> 6
equal to the price determined by multiplying such current exercise price by a
fraction, of which

(1) the numerator shall be

(i) the number of shares of the Corporation's Common Stock
outstanding when the then current exercise price became effective, plus

(ii) the number of shares of the Corporation's Common Stock
which the aggregate amount of consideration, if any, received by the
Corporation upon all issuances of the Corporation's Common Stock since the
current exercise price became effective (including the consideration, if any,
received for such Additional Common Stock) would purchase at the then current
exercise price per share, and

(2) the denominator shall be

(i) the number of shares of the Corporation's Common Stock
outstanding when the current exercise price became effective, plus

(ii) the number of shares of the Corporation's Common Stock
issued since the current exercise price became effective (including the number
of shares of such Additional Common Stock);

provided, however, that such adjustment shall be made only if such adjustment
results in a current exercise price less than the current exercise price in
effect immediately prior to the issuance of such Additional Common Stock. The
Corporation may, but shall not be required to, make any adjustment of the
current exercise price if the amount of such adjustment shall be less than one
percent (1%) of the current exercise price immediately prior to such
adjustment, but any adjustment that would otherwise be required then to be made
which is not so made shall be carried forward and shall be made at the time of
(and together with) the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than one percent (1%)
of the current exercise price immediately prior to such adjustment.

(c) Certain Rules in Applying the Adjustment for
Additional Stock Issuances. For purposes of any adjustment as provided in
Section 2.2(b) hereof, the following provisions shall also be applicable:

(1) Cash Consideration. In case of the issuance of
Additional Common Stock for cash, the consideration received

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<PAGE> 7
by the Corporation therefor shall be deemed to be the cash proceeds
received by the Corporation for such Additional Common Stock after
deducting any commissions or other expenses paid or incurred by the
Corporation for any underwriting of, or otherwise in connection with
the issuance of such Additional Common Stock.

(2) Non-Cash Consideration. In case of the issuance of
Additional Common Stock for a consideration other than cash, or a
consideration a part of which shall be other than cash, the amount of
the consideration other than cash so received or to be received by the
Corporation shall be deemed to be the value of such consideration at
the time of its receipt by the Corporation as determined in good faith
by the Board of Directors, except that where the non-cash
consideration consists of the cancellation, surrender or exchange of
outstanding obligations of the Corporation (or where such obligations
are otherwise converted into shares of the Corporation's Common
Stock), the value of the non-cash consideration shall be deemed to be
the principal amount of the obligations cancelled, surrendered,
satisfied, exchanged or converted. If the Corporation receives
consideration, part or all of which consists of publicly traded
securities (i.e., in lieu of cash), the value of such non-cash
consideration shall be the aggregate market value of such securities
(based on the latest reported sale price regular way) as of the close
of the day immediately preceding the date of their receipt by the
Corporation.

(3) Options, Warrants, Convertibles, Etc. In case of the
issuance after the date hereof, whether by distribution or sale to
holders of its Common Stock or to others, by the Corporation of (i)
any security (other than the shares of the Corporation's Series A
Preferred Stock) that is convertible into Common Stock, or (ii) any
rights, options or warrants to purchase the Corporation's Common
Stock, if inclusion thereof in calculating adjustments under this
Section 2.2 would result in a current exercise price lower than if
excluded, the Corporation shall be deemed to have issued, for the
consideration described below, the number of shares of the
Corporation's Common Stock into which such convertible security may be
converted when first convertible, or the number of shares of the
Corporation's Common Stock deliverable upon the exercise of such
rights, options or warrants when first exercisable, as the case may be
(and such shares shall be deemed to be Additional Common Stock for
purposes of Section 2.2(b) hereof). The consideration deemed to be
received by the Corporation at the time of the issuance of

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<PAGE> 8
such convertible securities or such rights, options or warrants shall
be the consideration so received determined as provided in Section
2.2(c)(1) and (2) hereof plus (x) any consideration or adjustment
payment to be received by the Corporation in connection with such
exercise or, as applicable, (y) the aggregate price at which shares of
the Corporation's Common Stock are to be delivered upon the exercise
of such rights, options or warrants when first exercisable (or, if no
price is specified and such shares are to be delivered at an option
price related to the market value of the subject Common Stock, an
aggregate option price bearing the same relation to the market value
of the subject Common Stock at the time such rights, options or
warrants were granted). If, subsequently, (1) such number of shares
into which such convertible security is convertible, or which are
deliverable upon the exercise of such rights, options or warrants, is
increased or (2) the exercise or exercise price of such convertible
security, rights, options or warrants is decreased, then the
calculations under the preceding two sentences (and any resulting
adjustment to the current exercise price under Section 2.2(b) hereof)
with respect to such convertible security, rights, options or
warrants, as the case may be, shall be recalculated as of the time of
such issuance but giving effect to such changes (but any such
recalculation shall not result in the current exercise price being
higher than that which would be calculated without regard to such
issuance). On the expiration or termination of such rights, options
or warrants, or rights to convert, the exercise price hereunder shall
be readjusted (up or down as the case may be) to such current exercise
price as would have been obtained had the adjustments made with
respect to the issuance of such rights, options, warrants or
convertible securities been made upon the basis of the delivery of
only the number of shares of the Corporation's Common Stock actually
delivered upon the exercise of such rights, options or warrants or
upon the exercise of any such securities and at the actual exercise or
exercise prices (but any such recalculation shall not result in the
current exercise price being higher than that which would be
calculated without regard to such issuance).

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<PAGE> 9
referred to in Section 2.2(c)(3) hereof; provided, that to the extent
that such rights, options, warrants or exercise privileges are not
exercised, such shares of the Corporation's Common Stock shall be
deemed to be outstanding only until the expiration dates of the
rights, warrants, options or exercise privileges or the prior
cancellation thereof.

(d) Exclusion from the Adjustment for Additional Stock
Issuances. No adjustment of the current exercise price under Section 2.2(b)
hereof shall be made as a result of or in connection with the issuance of
Common Shares (i) upon conversion of the shares of Series A Preferred Stock or
Series B Preferred Stock (or the issuance of any shares of Series A Preferred
Stock or Series B Preferred Stock under any Purchase Agreement) or (ii) upon
exercise or conversion of the Warrants or the stock options granted to
employees of the Corporation on or before July 31, 1995.

(e) Accountants' Certification. Whenever the current
exercise price is adjusted as provided in this Section 2.2, the Corporation
will promptly obtain a certificate of a firm of independent public accountants
of recognized national standing selected by the Board of Directors of the
Corporation (who may be the regular auditors of the Corporation) setting forth
the current exercise price as so adjusted, the computation of such adjustment
and a brief statement of the facts accounting for such adjustment, and will
mail to the holders of the Warrants a copy of such certificate from such firm
of independent public accountants.

(f) Antidilution Adjustments under other Securities.
Without limiting any other rights available hereunder to the holders of shares
of Warrants, if there is an antidilution adjustment (x) under any security
which is convertible into Common Stock of the Corporation whether issued prior
to or after the date hereof or (y) under any right, option or warrant to
purchase Common Stock of the Corporation whether issued prior to or after the
date hereof, which (in the case of clause (x) or (y)) results in a reduction in
the exercise or purchase price with respect to such security, right, option or
warrant to an amount less than the then current exercise price or results in an
increase in the number of shares obtainable under such security, right, option
or warrant which has an effect equivalent to lowering a exercise or exercise
price to an amount less than the then current exercise price, then an
adjustment shall be made under this Section 2.2(f) to the then current exercise
price hereunder. Any such adjustment under this Section 2.2(f) shall be
whichever of the following results in a lower current exercise price:

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<PAGE> 10
(A) a reduction in the current exercise price
equal to the percentage reduction in such exercise or purchase
price with respect to such security, right, option or warrant,
or

(B) a reduction in the current exercise price
which will result in the same percentage increase in the
number of Common Shares available under this Section 2.2 as
the percentage increase in the number of shares available
under such security, right, option or warrant.

Any such adjustment under this Section 2.2(f) shall only be made if it would
result in a lower current exercise price than that which would be determined
pursuant to any other antidilution adjustment otherwise required under this
Section 2.2 as a result of the event or circumstance which triggered the
adjustment to the security, right, option or warrant described in clause (x) or
(y) above (and if any such adjustment is so made under this Section 2.2(f),
then such other antidilution adjustment otherwise required under this Section
2.2 shall not be made as a result of such event or circumstance).

(g) Other Adjustments. In case any event shall occur as
to which any of the provisions of this Section 2.2 are not strictly applicable
but the failure to make any adjustment would not fairly protect the exercise
rights represented by the Warrants in accordance with the essential intent and
principles of this Section 2.2, then, in each such case, the Corporation shall
appoint a firm of independent public accountants of recognized national
standing selected by the Board of Directors of the Corporation (who may be the
regular auditors of the Corporation), which shall give their opinion upon the
adjustment, if any, on a basis consistent with the essential intent and
principles established in this Section 2.2, necessary to preserve, without
dilution, the exercise rights represented by the Warrants. Upon receipt of
such opinion, the Corporation will promptly mail copies thereof to the holders
of the Warrants and shall make the adjustments described therein.

(h) "Meaning of "Issuance". References in this Agreement
to "issuances" of stock by the Corporation include issuances by the Corporation
of previously unissued shares and issuances or other transfers by the
Corporation of treasury stock.

2.3. RECAPITALIZATION, CONSOLIDATION OR MERGER OR SALE OF
ASSETS. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Corporation's assets to another
Person or other transaction which is effected in such a way that holders of
Common Stock are entitled

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<PAGE> 11
to receive (either directly or upon subsequent liquidation) stock, securities
or assets with respect to or in exchange for Common Stock is referred to herein
as an "Organic Change." Prior to the consummation of any Organic Change, the
Corporation shall make appropriate provision (in form and substance reasonably
satisfactory to holders of Warrants representing a majority of the Shares then
outstanding) to insure that each of the holders of the Warrants shall
thereafter have the right to acquire and receive in lieu of or in addition to
(as the case may be) the shares of Common Stock immediately theretofore
acquirable and receivable upon the exercise of such holder's Warrants, such
shares of stock, securities or assets as may be issuable or payable with
respect to or in exchange for the number of shares of Common Stock immediately
theretofore acquirable and receivable upon exercise of such holder's Warrants
had such Organic Change not taken place.

In any such case, the Corporation shall make appropriate
provision (in form and substance reasonably satisfactory to the holders of
Warrants representing a majority of the Warrants then outstanding) with respect
to such holders' rights and interest to insure that the provisions hereof shall
thereafter be applicable to the Warrants (including, in the case of any such
consolidation, merger or sale in which the successor entity or purchasing
entity is other than the Corporation, an immediate adjustment of the exercise
price to reflect the value for the Warrants reflected by the terms of such
consolidation, merger or sale, if the value so reflected would cause an
increase to the exercise price in effect immediately prior to such
consolidation, merger or sale). The Corporation shall not effect any such
consolidation, merger or sale, unless prior to the consummation thereof, the
successor entity (if other than the Corporation) resulting from such
consolidation or merger or the Corporation purchasing such assets assumes by
written instrument (which may be the agreement of consolidation, merger or
sale), in form and substance reasonably satisfactory to the holders of Warrants
representing a majority of the shares then outstanding, the obligation to
deliver to each such holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
acquire.

SECTION 3. NOTICE TO HOLDERS OF WARRANTS.

In case at any time

(i) the Company shall take any action which would require
an adjustment in the current exercise price pursuant to Section 2.2 or
2.3; or

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<PAGE> 12
(ii) there shall be any capital reorganization or
reclassification of the Company's Common Stock (other than a change in
par value or from par value to no par value or from no par value to
par value of the Company's Common Stock), or any consolidation or
merger to which the Company is a party and for which approval of any
stockholders of the Company is required, or any sale, transfer or
lease of all or substantially all of the assets of the Company; or

(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;

then, in any one or more of such cases, the Company shall give written notice
to the holders of the Warrants, not less than twenty (20) days before any
record date or other date set for definitive action, of the date on which such
action, reorganization, reclassification, consolidation, merger, sale,
transfer, lease, dissolution, liquidation or winding-up shall take place, as
the case may be. Such notice shall also set forth such facts as shall indicate
the effect of any such action (to the extent such effect may be known at the
date of such notice) on the current exercise price and the kind and amount of
the shares and other securities and property deliverable upon exercise of the
Warrants. Such notice shall also specify any date as of which the holders of
record of the Company's Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon any such
reorganization, reclassification, consolidation, merger, sale, transfer, lease,
dissolution, liquidation or winding-up, as the case may be.

SECTION 4. ADJUSTMENTS TO NUMBER OF SHARES ISSUABLE
HEREUNDER. The number of Shares called for on the face of this Warrant is the
number of Shares which can be purchased under this Warrant on the date of
original issuance of this Warrant at an exercise price of $1.125 per Share
(subject to reduction from time to time pursuant to clause (ii) of Section 1.4
hereof). Without limiting any other provision of this Warrant, notwithstanding
the number of Shares so called for on the face of this Warrant, the aggregate
number of Shares that can be acquired upon an exercise of this Warrant in whole
or in part shall be adjusted from time to time pursuant to Section 2 hereof.

SECTION 5. SPECIFIC PERFORMANCE. The Company agrees and
stipulates that the remedies at law of a holder of this Warrant in the event of
any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by

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<PAGE> 13
a decree for the specific performance of any agreement contained herein or by
an injunction against a violation of any of the terms hereof or otherwise.

SECTION 6. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof any rights as a stockholder of the Company (prior to exercise of all or
a portion of this Warrant) or as imposing any liabilities on such holder to
purchase any securities or any liabilities as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors or
stockholders of the Company or otherwise.

SECTION 7. OWNERSHIP; TRANSFER. The Company may treat the
person in whose name this Warrant is registered as the owner and holder of this
Warrant for all purposes, and the Company shall not be affected by any notice
to the contrary (except that the Company shall comply with the provisions of
Section 14 of the Purchase Agreement regarding the issuance of a new Warrant or
Warrants to permitted transferees). This Warrant is transferable only upon the
conditions, and subject to the restrictions, specified in Section 14 of the
Purchase Agreement.

SECTION 8. HEADINGS. The headings and captions in this
Warrant are for convenience of reference only and shall not define, limit or
otherwise affect any of the terms or provisions hereof.

SECTION 9. GOVERNING LAW. This Warrant shall be governed by,
and construed in accordance with, the laws of the State of New York (other than
any conflict of laws rule which might result in the application of the laws of
any other jurisdiction).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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<PAGE> 14
IN WITNESS WHEREOF, SA HOLDINGS, INC. has caused this Warrant
to be executed and issued on its behalf by its officer thereunto duly
authorized as of the date first above written.

SA HOLDINGS, INC.

By
--------------------------------
Name:
Title:

[SIGNATURE PAGE TO COMMON STOCK WARRANT CERTIFICATE]

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<PAGE> 15
ANNEX A

FORM OF SUBSCRIPTION

(To be executed only upon exercise or conversion
of the Warrant in whole or in part)

To SA Holdings, Inc.:

The undersigned registered holder of the accompanying Warrant
hereby exercises such Warrant or portion thereof for, and purchases thereunder,
1/ Shares (as defined in such Warrant) and herewith [makes
payment therefor of $ ] [or] [makes payment therefor by conversion of
Shares represented by such Warrant pursuant to Section 1.6 of such
Warrant]. The undersigned requests that the certificates for such Shares be
issued in the name of, and delivered to, whose address is .

Dated:

(Name must conform to name of holder as
specified on the face of the Warrant)

By
-------------------------------------
Name:
Title:

Address of holder:

-------------------------------------

- ---------------------
1/ [Insert the number of Shares as to which this Warrant is being exercised.
In the case of a partial exercise, a new Warrant or Warrants will be issued
and delivered, representing the unexercised portion of this Warrant, to the
holder surrendering the same.]

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<PAGE> 1
SCHEDULE 13D Page 13 of ___ Pages

EXHIBIT E

Joint Filing Agreement

The undersigned hereby agree to file jointly a Schedule 13D with respect
to the equity securities of SA Telecommunications, Inc. held by them.

Dated: August 9, 1995

Jesup & Lamont Capital Markets, Inc.

By: Howard Curd
---------------------------------
Name: Howard Curd
Title: Executive Vice President

Eagle Financial Group, Inc., d/b/a
Jesup & Lamont Group Holdings, Inc.

By: Howard Curd
---------------------------------
Name: Howard Curd
Title: President and Co-Chief
Executive Officer

Howard Curd
----------------------------------------
Howard Curd